DBRS Morningstar Assigns BBB Rating, Negative Trend, to Ford Motor Company’s $800 Million Retail Notes Issuance

DBRS Limited (DBRS Morningstar) assigned a rating of BBB with a Negative trend to the 6.000% senior unsecured notes due 2059 (the Notes) issued by Ford Motor Company (Ford or the Company). The Notes have an aggregate principal amount of $800 million and may be called by Ford (in whole or in part) on or after December 1, 2024.

The rating assigned to this newly issued debt instrument is based on the rating of already outstanding debt series of the above-mentioned debt instrument.

DBRS Morningstar notes that Ford’s overall financial risk assessment (FRA) is sound, with the Company’s balance sheet capable of absorbing the entire issuance amount and its FRA remaining well commensurate with the assigned ratings. Moreover, DBRS Morningstar notes that the issuance serves to effectively refinance certain indebtedness of the Company. This includes Ford’s U.S. Department of Energy Advanced Technology Vehicle Manufacturer Incentive Program (DOE ATVM) loan facilities, which as of September 30, 2019, had an outstanding balance of USD 1.55 billion, with USD 591 million due within the next year. In this context, the new issuance does not materially increase the Company’s automotive leverage (i.e., debt/capital) and is essentially leverage neutral.

Notes:
All figures are in U.S. dollars unless otherwise noted.

The principal methodologies are Rating Companies in the Automotive Manufacturing and Supplier Industries (October 2019) and DBRS Criteria: Guarantees and Other Forms of Support (January 2019), which can be found on dbrs.com under Methodologies & Criteria.

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