Moody's downgrades Ford, Ford Credit

Moody's Investors Service said it lowered the corporate family and senior unsecured ratings of Ford Motor Co. to B2 from Ba3 and the senior unsecured rating of Ford Motor Credit Co. to Ba3 from Ba2. The speculative grade liquidity rating has been affirmed at SGL-1, indicating very good liquidity over the coming 12-month period.

The outlook is negative.

The downgrade of the Ford ratings reflects Moody's expectation that the company's performance in North America will face considerable additional stress due to high fuel prices and the resulting shift in consumer preference away from the very profitable SUV segment.

Moody's noted that the strong performance of Ford's new cars is certainly a positive, but the profitability of these vehicles isn't as close to what the company had been earning on Explorers and Expeditions.

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