Moody's upgrades Volkswagen

Moody's Investors Service said it upgraded the long-term senior ratings of Volkswagen AG to A2 from A3 and the undated euro-denominated subordinated notes issued by Volkswagen International Finance NV to Baa1 from Baa2. The outlook is stable.

"Today's upgrade reflects our expectation of further improvement in Volkswagen's operational performance in the next 12 to 18 months, despite mixed global economic conditions, owing to the company's robust portfolio of brands, established market positions in Western Europe and China, as well as ongoing efforts to increase operational efficiency, especially within its main brand,” Yasmina Serghini-Douvin, a Moody's senior credit officer, said in an agency news release.

“We expect that improved profitability will help Volkswagen sustain a positive robust free cash flow, even though investments will remain at a high level in the next few years given the structural need to develop new models, invest in technologies and meet stringent regulatory requirements in major car markets."

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