Fitch upgrades AB Volvo

Fitch Ratings said it upgraded AB Volvo's long-term issuer default rating and senior unsecured rating to BBB+ and Volvo Treasury AB's senior unsecured rating to BBB+ from BBB.

The outlook is stable.

The agency also upgraded Volvo Treasury AB's €900 million 5.5-year non-call and €600 million 8.25-year non-call subordinated fixed-to-reset capital securities to BBB- from BB+. The securities are unconditionally and irrevocably guaranteed by Volvo.

“The upgrade reflects the continued improvement in profitability and leverage, and Fitch's expectations that Volvo will be able to maintain its cost efficiencies, including during the next cyclical sector weakening,” the agency said in a news release.

“Profitability has increased following the completion of the 2013-2015 restructuring program and the divestment of non-core assets.”

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