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FORD MOTOR Credit Co successfully launched a benchmark Eu750m five year transaction this week despite dramatic widening of its spreads, mainly in the dollar market.
The spread widening followed the announcement by Bridgestone that it would recall 6.5m tyres that are the focus of an investigation into accidents that have claimed at least 88 lives. Bridgestone/Firestone and Ford are expected to face litigation in connection with the tyre recall.
Despite the potential damages Ford may have to pay, Standard & Poor's has affirmed Ford Motor Co's long term rating as single-A and its short term debt rating as A-1. Moody's has yet to affirm its A2 rating, but analysts close to the agency believe it is relatively comfortable with the situation.
The successful distribution of the Eu750m bond confirms that, in investors' minds at least, Ford has the ability to overcome its present difficulties.
Robert Rooney, head of syndicate at Morgan Stanley Dean Witter, joint bookrunner with Deutsche Bank, told Euroweek that the deal was substantially...