Fitch downgrades Ford, Ford Motor Credit

Fitch Ratings said it downgraded to B- from B the long-term issuer default ratings of Ford Motor Co., Ford Motor Credit Co. LLC, Ford Holdings, Inc., Ford Motor Co. of Australia, FCE Bank Plc, Ford Capital BV, Ford Credit Canada Ltd., Ford Credit Australia Ltd. and Ford Motor Credit Co. of New Zealand.

The agency also lowered Ford's senior secured credit facility and senior secured term loan to BB-/RR1 from BB/RR1, its senior unsecured debt to CCC+/RR5 from B-/RR5 and the trust preferred stock of Ford Motor Co. Capital Trust II to CCC/RR5 from CCC+/RR6.

The senior unsecured debt of Ford Holdings and Ford Motor Co. of Australia was lowered to CCC+/RR5 from B-/RR5, and the senior unsecured debt of Ford Motor Credit, FCE Bank, Ford Capital BV, Ford Credit Canada and Ford Motor Credit Co. of New Zealand was lowered to B+/RR2 from BB-/RR2.

The short-term issuer default ratings and commercial paper were affirmed at B.

The outlook remains negative.

The agency said the downgrade reflects the further deterioration in Ford's U.S. sales as a result of economic conditions, an adverse product mix and the most recent jump in gas prices; portfolio deterioration at Ford Credit and heightened concern regarding economic access to capital to support financing requirements; and escalating commodity costs that will remain a significant offset to cost reduction efforts.

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