On June 15, 2004, Standard & Poor's Ratings Services lowered its long-term corporate credit ratings on Germany-based automaker Volkswagen AG (VW) and related entities, including Volkswagen Financial Services AG (VW FS) and Volkswagen Bank GmbH (VW Bank) to 'A-' from 'A', owing to its weakening profitability. At the same time, the short-term ratings were lowered to 'A-2' from 'A-1'. The outlook is negative. The downgrades reflect Standard & Poor's expectation that VW's profitability and free cash flow generation will remain weak in the medium term, despite the additional cost-cutting and revenue-enhancement measures outlined in the group's "ForMotion" program. We are skeptical whether this program is far-reaching enough to strengthen group performance sufficiently to allow VW to return to the profitability...
Companies mentioned in this report are:
- Volkswagen AG
- Volkswagen Group Services S.A.
- Volkswagen Financial Services AG
- Volkswagen Bank GmbH
- Volkswagen Insurance Co. Ltd.
Action: Outlook: Negative
Action: Removed From CreditWatch
Standard and Poors RatingsXpress Credit Research provides in-depth coverage of international corporates, financial institutions, insurance companies, utilities, sovereigns and structured finance programs. RatingsXpress Credit Research lets users determine the credit rating of holdings and identify key factors underlying an issuer's creditworthiness, distinguishes the different risk exposures for new and existing deals, and provides an understanding of how their analysts interpret key regulatory, political and environmental events and their economic impact.
Product Type: Research Update
Research updates complement media releases. They offer more depth and detail than summary analyses by incorporating all information published in the media release. They are more up to date than summaries in that they are published simultaneously with media releases. SHOW LESS READ MORE >