August 30, 2018—Ford Motor Co.’s credit rating was cut to one notch above junk by Moody’s Investors Service, adding to the car company’s woes after it embarked on a costly restructuring that could take years to complete, reported Bloomberg.
Moody’s downgraded Ford to Baa3 from Baa2 with a negative outlook, it said in a report Wednesday. The ratings company cited erosion in Ford’s “global business position and the challenges it will face implementing” its restructuring effort that could rack up $11 billion in the next three to five years, according to the report.
Ford’s 5.291 percent notes due 2046 were among the biggest decliners in the U.S. investment-grade market Wednesday, falling to the lowest since their 2016 issue, to about 91 cents on the dollar, according to Trace data. The firm’s shares also fell to close 0.4 percent down at $9.97 in New York trading.
According to Bloomberg, a descent into junk would be a blow to Ford after six years of investment-grade status. The automaker avoided joining its U.S. peers in bankruptcy during the financial crisis, thanks in part to more than $23 billion in loans taken out in 2006.