Fitch cuts Ford Otomotiv outlook to negative

Fitch Ratings said it revised the outlook on Turkey-based Ford Otomotiv Sanayi AS's senior unsecured local currency debt rating to negative from stable and affirmed the rating at BBB-.

Fitch has changed the company's outlook to align it with that of its U.S. parent Ford Motor Co. (senior unsecured debt BBB-/negative/F2), which owns 41% of Ford Otomotiv.

Although Ford, together with another 41% shareholder Koc Holding, have historically provided Ford Otomotiv with support in the form of guarantees at times of financial distress, these guarantees are no longer in place and the Turkish company is servicing its debt with relative ease. In Fitch's opinion, Ford Otomotiv's credit metrics continue to be satisfactory for the current rating level.

The rating also takes into account the strategic importance of Ford Otomotiv for Ford Europe and Ford Otomotiv's inherent operational dependency on Ford Europe in marketing, distribution and developing Ford branded vehicles, the agency said.

The company has reduced its gross debt to $233 million at the end of the first nine months of 2005 from $313 million a year ago. Ford Otomotiv has also maintained its local market leadership with a 17% share.

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