DBRS puts Volkswagen on negative review

DBRS said it placed the long-term ratings of Volkswagen AG under review with negative implications.

The agency also said it confirmed the company’s short-term ratings at R-1 (low) with a stable trend in light of the company’s very solid liquidity position.

The negative review follows the company’s announcement that emissions from about 11 million of their diesel vehicles worldwide deviated from bench-test results and actual road use, DBRS said.

Moreover, the company also indicated that it plans to take provisions in the amount of about €6.5 billion in the forthcoming quarter to cover necessary measures and other efforts to win back lost trust of its customers, the agency said.

The U.S. Environmental Protection Agency recently issued the company a notice of violation of the Clean Air Act, alleging that four-cylinder Volkswagen and Audi diesel cars from model years 2009 to 2015 include software that circumvents EPA emissions standards for certain air pollutants, the agency said.

The EPA added that the company faces fines of a maximum potential amount of $37,500 per vehicle, which could theoretically total $18 billion given the population of affected vehicles in the United States, DBR said.

DBRS noted that the company’s liquidity position is robust.

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