Moody's changes Jaguar outlook to positive

Moody's Investors Service said it affirmed the Ba2 corporate family rating, Ba2-PD probability of default rating and Ba2 senior debt rating of Jaguar Land Rover Automotive plc and changed the outlook to positive from stable.

The agency said the outlook change reflects Jaguar Land Rover's continued solid operational performance in its key markets and Moody’s expectations that upcoming model launches together with the company's expansion plans in China have the potential to support future growth of both the Land Rover and Jaguar brands.

However, Moody's cautioned that although the company's credit metrics currently meet the agency’s guidelines for an upgrade, they are likely to deteriorate from their current levels in the next 12 to 18 months because of the expected rise in capital spending that Jaguar Land Rover will spend to fund future product launches, investments in research and development and capacity expansion projects in emerging markets.

The agency nevertheless believes that, should Jaguar Land Rover be able to fund a substantial part of its upcoming large capital spending with its internally generated cash flows while maintaining its financial policy broadly unchanged, then that would strengthen the company's position in its rating category.

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