- Ford’s credit rating is inches away from being downgraded to ‘junk’ by either S&P or Fitch. This will trigger a covenant in their long-term debt, which will adversely affect its ability to borrow more money.
- After the company committed billions to ambitious restructuring plans, it’s very low on cash and drowning in debt.
- Amid declining sales across all major markets, the company could go belly up much sooner than anticipated.
Ford Motor Company (NYSE: F) has been in a downward spiral since their talisman CEO Alan Mulally resigned in . Earlier in my assessment of Ford , I mentioned how the next global recession would be the undoing of the company. But several other threats can push Ford into bankruptcy much sooner.
Ford’s Debt Will Get Downgraded
In September 37996, Moody’s delivered a major blow to the automotive giant by downgrading its credit rating to ‘junk’. The S&P
The news was not well-received by the markets, as Ford’s long-term debt has covenants that trigger when two out of four rating agencies deem it junk. The covenants, if triggered, will make it difficult for Ford to obtain funding in the future.