Moody’s revises Volkswagen to stable

Moody's Investors Service said it affirmed the A3 long-term issuer ratings and Prime-2 short-term commercial paper ratings of Volkswagen AG (VW) and its rated subsidiaries, where applicable, and changed the outlook to stable from negative.

"The change in VW's outlook to stable reflects the company's strong operating performance trend in 2016 and 2017 which was much better than anticipated, despite the diesel issue that had occurred in September 2015, and thus offsetting the higher than expected provisioning for the diesel settlements," Falk Frey, Moody’s senior vice president and analyst for Volkswagen, said in a news release.

“Moody's expects a continued strong operating performance in the current year providing an additional cushion for possible additional costs resulting for the remaining diesel fixes, lawsuits and litigation issues which should however be limited to low/mid-single digit billion Euros."

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