S&P upgrades Volvo

S&P said it raised the issuer credit rating on AB Volvo to A- from BBB+ and affirmed the short-term ratings at A-2 and K-1.

Positive performance trends and debt reduction at Volvo have resulted in improved credit metrics, S&P explained, and the company's industrial operations are forecast to be in a net cash position at year-end 2019.

Given this strong financial position, along with an expectation of a supportive industry environment in 2019, the agency said it anticipates Volvo will better withstand tougher market conditions.

The stable outlook reflects a view that Volvo's industrial operations will maintain EBITDA margins of more than 11% over the cycle, as well as a strong balance sheet supported by positive discretionary cash flow.

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