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DBRS pumps up Mercedes Benz Group
DBRS said it raised its ratings for Mercedes-Benz Group AG and subsidiaries Mercedes-Benz Finance Canada Inc. and Mercedes-Benz Finance North America LLC to A from A (low).
The agency also assigned an A medium-term notes credit rating to Mercedes-Benz International Finance BV (MBIF). The credit rating is consistent with that of its ultimate parent, Mercedes.
“The long-term credit ratings upgrade reflects the company’s persistent solid earnings performance (that has exceeded DBRS Morningstar’s expectations), notwithstanding various meaningful headwinds that include interest rate and inflationary pressures, geopolitical uncertainty, and ongoing supply constraints. This resilient financial performance amid Mercedes’ conservative financial policy, results in a financial risk assessment (FRA) that remains strong even in the context of the upgraded credit ratings,” DBRS said in a press release.
The agency noted, “The company’s 2022 operating performance improved considerably year over year, with the industrial operations attaining a solid annual operating margin of 11.2% (as calculated by DBRS Morningstar). Positive factors included stronger pricing, a firmer product mix, and slightly higher volumes. These were partly offset by inflationary pressures, including higher raw material and supply chain costs, as well as increased investments in future technologies and vehicles.”
The trends are stable.
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