Moody's: Volkswagen notes A3

Moody's Investors Service said it assigned A3 long-term ratings to Volkswagen International Finance NV's $700 million of 1.875% series A notes due 2014, $650 million of 2.875% series B notes due 2016, $500 million of floating plus 0.45% per annum series C notes due 2012 and $850 million of floating plus 0.61% per annum series D notes due 2014.

The notes are unconditionally and irrevocably guaranteed by Volkswagen Aktiengesellschaft (A3/P-2).

The ratings are supported by the company's strong competitive position with a diverse product range, high brand recognition and successful model launches over recent years, the agency said. Despite the deterioration in the group's operating performance during the industry downturn in late 2008 and 2009, its financial metrics proved to be more resilient than those of its European automotive peers.

The group benefited in particular from being the principal beneficiary of European scrappage schemes, a good product offering and leading market positions in China and Brazil, the agency added.

The ratings remain constrained by the cyclicality of global auto demand and its dependence on the overall global economic environment, the agency said.

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