Post by TonyV on Mar 30, 2010 1:41:04 GMT -5
Last Updated: March 29. 2010 11:47AM .
S&P leaves Ford rating unchanged
The Detroit News
Standard & Poor's Ratings Services said today that Ford Motor Co.'s binding deal to sell Volvo Car Corp. to Zhejiang Geely Holding Group Co. Ltd. for $1.8 billion will not immediately affect the agency's credit rating for Ford.
Although the terms of the sale agreement call for $1.6 billion to be paid in cash and the rest in a note, Ford noted on Sunday that adjustments for pension deficits, debt, cash and working capital might reduce the cash proceeds significantly.
Under the terms of Ford's credit agreement, Ford must use up to half of the proceeds from any Volvo sale to repay its secured term debt. "We plan to reassess our issue-level and recovery ratings on Ford's secured debt once the company discloses the amount of net cash proceeds and resulting debt repayment," S&P said in a statement.
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The Volvo sale is expected to close during the third quarter.