DETROIT (Reuters) - Ford Motor Co (F.N) received its second “investment grade” credit rating on Tuesday, allowing the No. 2 U.S. automaker to reclaim its Blue Oval insignia and other assets it mortgaged to fund its turnaround plan nearly six years ago.
Moody’s Investors Service boosted Ford’s credit rating to Baa3 from Ba2, citing Ford’s lower break-even point in North America, improved lineup of cars and trucks, and commitment to matching vehicle production with consumer demand.
“The key factor in our considering an investment-grade rating for Ford was whether or not the company would be able to sustain its strong performance,” said Bruce Clark, senior vice president with Moody’s. “We concluded that the improvements Ford has made are likely to be lasting.”
Moody’s move comes after Fitch Ratings upgraded Ford to investment grade last month. The Moody’s upgrade means Ford can now reclaim the collateral underpinning $23.5 billion in loans that Ford took in 2006 to fund its turnaround.
Chief Executive Alan Mulally’s “One Ford” mandate, which has been the centerpiece of Ford’s strategy, centered on unifying the automaker’s once-disconnected business units, and taking advantage of its scale to drive down costs and build a global brand.
Reclaiming the logo, which is stamped on the grills of Ford cars and trucks, is a major symbolic milestone for Ford. Executives have described the goal as a “rallying cry” within Ford’s headquarters.
“When we pledged the Ford Blue Oval as part of the loan package, we were not just pledging an asset. We pledged our heritage,” Chairman Bill Ford said in a statement.
“Getting the Ford Blue Oval back feels amazing, and it is one of the best days that I can remember.”
Reporting by Deepa Seetharaman; Editing by Bernard Orr and Matthew Lewis