Fitch affirms Volkswagen

Fitch Ratings said it affirmed Volkswagen Group's long-term issuer default rating and senior unsecured notes at A- and short-term issuer default rating at F2 following news that it will acquire the remaining 49.9% stake in Porsche AG that it did not own.

The outlook is positive.

The agency also affirmed Volkswagen International Finance NV's senior unsecured debt at A-.

The affirmation reflects the group's significant financial flexibility from its substantial cash reserves and strong free cash flow generation, Fitch said.

The agency said it already factored this acquisition into its latest rating action and stated that the group would be able to accommodate the cash outflow related to expected investments such as the Porsche transaction without jeopardizing its financial profile.

The transaction also will be positive from a business standpoint as it leads to the creation of an integrated group, in turn enabling the companies to fully unlock potential synergies, Fitch said.

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