The global outlook for Auto Back Securities (ABS) is steady – except in North America, where underwriting standards and borrower credit are slipping. (Read More…)
Citing weak results in 2013 and guidance challenges for 2014, investment ratings agency Moody’s has cut Fiat’s rating from B3a to B1, four notches below investment grade.
In another sign that largest American automaker has come back from its 2009 bankruptcy, for the first time since 2005, a credit rating firm has judged General Motors’ corporate debt to be investment-grade. On Tuesday, Moody’s Investors Service raised GM’s rating to Baa3 from Ba1. Baa3 is Moody’s lowest rating that it considers worthy of investment.
Today, credit rating agency Moody’s cut the rating on Fiat’s bonds down two notches from Ba1 to Ba3. Merrill Lynch wrote in a letter to customers that it is ”worth remembering that Fiat debt is already junk rated so there will not be a change in the credit investor base for Fiat, but cost of refinancing goes up.”
Officially, bonds in the Ba family are regarded to be of “questionable credit quality”. In the business, “Ba1” is known as junk, B3 as “bad junk”. It is interesting what got Fiat the demerits: Chrysler. (Read More…)
Not very unexpectedly, ratings agency Moody’s is looking into taking it’s view of Toyota’s long-term debt down a notch. Usually reliable Reuters says that Moody’s “put its credit rating on Toyota Motor Corp on review for a possible downgrade.” For the obvious reasons, namely disruptions to Toyota’s supply chain from the March 11 earthquake and tsunami and subsequent power cuts. Even if bond ratings put you to sleep, you might be interested in Moody’s views on the resumption on normal car production. (Read More…)
Yabe! (Oh shoot.) As the sun set over Toyota City and Tokyo, Toyota’s execs and Sararimen (salary men) alike were crying in their sake. Today was a sai aku (very bad) day. A day everybody at Toyota most likely would want to forget. No, no recall for a change. There isn’t much left to recall anyway, or so it seems.
The sai aku day started with Moody’s downgrading Toyota’s formerly stellar credit rating to “its lowest-ever level,” as The Nikkei [sub] laments. Moody’s came to the somewhat belated conclusion that “multi-million vehicle recalls and safety issues raise questions about its profitability and ability to stay ahead of rivals on pricing power until 2012 at the earliest.”
To make matters even more sai aku, Moody’s warned that its outlook for the rating remains negative. Why the pessimism? (Read More…)
Toyota will end their fiscal year ending in March badly bruised. Financial Times reports that ToMoCo’s losses will be three times larger than previously forecast. The worst industry slump in decades has put a painful crimp in an amazing run. Last year, Toyota earned a record operating profit of $30b. In the same year, they became officially the world’s largest automaker, a title many had said should have been given to Toyota a year before. In November 2008, Toyota still projected a profit of $6.6b. Then, carmageddon caught up with them.