Certain Ford Motor,Related Ent's Rtgs Lowered by S&P.NEW YORK--(BUSINESS WIRE)--S&P CreditWire 10/8/97-- Standard & Poor's today lowered certain ratings of Ford Motor Co. and various related entities (see list below). The ratings outlooks are stable (except as noted below). Ratings of Associates First Capital Corp. (The Associates) and subsidiaries were affirmed (see separate press release). Debt outstanding totals approximately $164 billion. The downgrades reflect the significant deterioration in Ford's financial flexibility that will result from completion of the just-announced plan to distribute to shareholders its 80.7 percent ownership stake in The Associates. This holding - which has a current market value of over $17 billion - had been viewed by Standard & Poor's as an important store of value. Moreover, the substantial and growing earnings contribution of The Associates had afforded Ford some measure of diversity amidst its cyclical automotive business. Ford's financial flexibility remains considerable, particularly in light of its large cash position. Also, the company's earnings have been at record levels in recent quarters, owing in large part to cyclically robust demand levels, its successful new sport utility and pickup offerings, the benefits of accelerated cost-cutting efforts, and some success in turning around the performance of its problematic European and Latin American operations. OUTLOOK: STABLE Continued favorable market conditions in North America North America, third largest continent (1990 est. pop. 365,000,000), c.9,400,000 sq mi (24,346,000 sq km), the northern of the two continents of the Western Hemisphere. over the next one to two years should enable Ford to maintain excellent overall financial results. Over the longer term, though, Ford's financial flexibility could well be tested. An eventual cyclical downturn is inevitable. Certain major Japanese automakers are enjoying a resurgence in their competitiveness in North America. The secular shift in consumer preferences from conventional passenger cars to light truck alternatives - which now account for a highly disproportionate share of Ford's earnings -- has been slowing, while many new competing products are being introduced. In addition, the Western European automotive industry The automotive industry is the industry involved in the design, development, manufacture, marketing, and sale of motor vehicles. In 2006, more than 69 million motor vehicles, including cars and commercial vehicles were produced worldwide. remains beset by excess production capacity, which could impede Ford's ability to achieve adequate profitability in that market. --CreditWire RATINGS LOWERED Rating To From Ford Motor Co. Corporate credit rating A/Stable/A-1 A+/Stable/A-1 Senior debt A A+ Preferred stock Stock shares that have preferential rights to dividends or to amounts distributable on liquidation, or to both, ahead of common shareholders. Preferred stock is given preference over common stock. Holders of preferred stock receive dividends at a fixed annual rate. A- A Bank loan A A+ Ford Motor Co. of Australia Ltd. Corporate credit rating A-/Stable/- A/Stable/- Ford Motor Credit Co. Counterparty credit rating A/Stable/A-1 A+/Stable/A-1 Senior debt A A+ Subordinated debt Subordinated Debt A loan (or security) that ranks below other loans (or securities) with regard to claims on assets or earnings. Also known as "junior security" or "subordinated loan". A- A Bank loan A A+ Ford Credit Australia Ltd. Ford Motor Credit Co. of New Zealand New Zealand (zē`lənd), island country (2005 est. pop. 4,035,000), 104,454 sq mi (270,534 sq km), in the S Pacific Ocean, over 1,000 mi (1,600 km) SE of Australia. The capital is Wellington; the largest city and leading port is Auckland. Ltd. Ford Credit Canada Ltd. USL (UNIX System Laboratories, Inc.) An AT&T subsidiary formed in 1990, responsible for developing and marketing Unix. In 1993, USL was acquired by Novell and merged into Novell's UNIX Systems Group (USG). See Univel. 1. Capital Corp. Senior debt** A A+ Ford Holdings Inc. Senior debt* A A+ Ford Motor Co. Capital Trust I Preferred stock A- A Ford Credit Europe PLC Corporate credit rating A/Stable/A-1 A+/Stable/A-1 Senior debt A A+ Bank loan rating A A+ Ford Capital B.V. Sr debt* A A+ Hertz hertz (hûrts) [for Heinrich R. Hertz], abbr. Hz, unit of frequency, equal to 1 cycle per second. The term is combined with metric prefixes to denote multiple units such as the kilohertz (1,000 Hz), megahertz (1,000,000 Hz), and gigahertz Corp. Corporate credit rating BBB BBB A medium grade assigned to a debt obligation by a rating agency to indicate an adequate ability to pay interest and repay principal. However, adverse developments are more likely to impair this ability than would be the case for bonds rated A and above. +/Neg/A-2 A-/Neg/A-1 Senior debt BBB+ A- Subordinated debt BBB BBB+ Commercial paper A-2 A-1 Hertz Finance Centre PLC Hertz Australia Pty Ltd PTY LTD Propriety Limited (company structure in Australia) . (gtd: Hertz Corp.) Commercial paper A-2 A-1 RATINGS AFFIRMED Ratings Ford Motor Credit Co. Commercial paper** A-1 Ford Capital B.V. Ford Motor Co. S Ford Motor Co. U.S. automotive corporation. Founded in Detroit, Mich., in 1903 by Henry Ford and a group of investors, the company introduced the hugely successful Model T in 1908 and by 1923 was producing more than half of all U.S. automotive vehicles. .A. de C.V. Commercial paper* A-1 Ford Credit Europe PLC Commercial paper A-1 CDs A-1 Associates First Capital Corp. Counterparty credit rating A+/Stable/A-1 Commercial paper A-1 Associates Corp. of North America Counterparty credit rating AA-/Stable/A-1+ Senior debt AA- Subordinated debt A+ Commercial paper A-1+ *Guaranteed by Ford Motor Co. **Guaranteed by Ford Motor Credit Co. CONTACT: Scott Sprinzen, New York New York, state, United States New York, Middle Atlantic state of the United States. It is bordered by Vermont, Massachusetts, Connecticut, and the Atlantic Ocean (E), New Jersey and Pennsylvania (S), Lakes Erie and Ontario and the Canadian province of , 212-208-1667 |
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