Active Stocks
Sat Mar 02 2024 12:29:56
  1. Tata Steel share price
  2. 155.30 3.53%
  1. HDFC Bank share price
  2. 1,430.50 -0.05%
  1. State Bank Of India share price
  2. 773.40 0.53%
  1. ICICI Bank share price
  2. 1,084.60 -0.21%
  1. Axis Bank share price
  2. 1,095.00 -0.40%
Business News/ Industry / Banking/  Volkswagen gets outlook boost from Fitch on diesel clarity
BackBack

Volkswagen gets outlook boost from Fitch on diesel clarity

Volkswagen's debt outlook was raised to stable from negative at Fitch Ratings, which said the bulk of operational and financial risks from VW's diesel-emissions scandal are now known

Fitch also affirmed Volkswagen’s BBB+ long-term debt rating, three ranks above junk. Photo: ReutersPremium
Fitch also affirmed Volkswagen’s BBB+ long-term debt rating, three ranks above junk. Photo: Reuters

Volkswagen AG’s debt outlook was raised to stable from negative at Fitch Ratings, which said the bulk of operational and financial risks from the carmaker’s diesel-emissions scandal are now known.

Fitch also affirmed Volkswagen’s BBB+ long-term debt rating, three ranks above junk, saying after the market closed on Tuesday that while the possibility of further legal action related to emissions has not disappeared, the risks to the Wolfsburg, Germany-based carmaker have become manageable. The stable outlook means the credit-reporting firm is unlikely to change VW’s rating soon.

“In particular, we believe that the group could accommodate several billion euros in additional fines and/or recall and repair costs and still sustain its current ratings," Fitch said in a statement. VW has demonstrated “a strong resilience" since the start of the emissions crisis in September 2015, with only a limited impact on credit metrics seen by the “exit point" of 2019-2020, when the bulk of cash outflows will hit.

Volkswagen has set aside €22.6 billion ($25.7 billion) so far to pay for fixing or buying back vehicles, fines and other penalties. It faces further costs from lawsuits related to its rigging of as many as 11 million diesel-powered cars worldwide to cheat on emissions tests. The carmaker, the world’s largest, is also in the midst of a reorganization that chairman Hans Dieter Poetsch is overseeing to prevent a repeat of the scandal.

The carmaker’s shares declined 0.3% to €133.70 as of 9:27 am in Frankfurt, valuing the company at €68.1 billion. Its €1.5 billion bond maturing in October 2023 traded down 0.1% at €100.47.

Fitch lowered Volkswagen’s rating to BBB+ from A in November 2015 with a negative outlook, saying the scandal raised questions about management and internal controls. The firm stood by the rating last June after provisions against the crisis hurt earnings, while saying the group was showing resilience and had improved visibility.Bloomberg

Unlock a world of Benefits! From insightful newsletters to real-time stock tracking, breaking news and a personalized newsfeed – it's all here, just a click away! Login Now!

Catch all the Industry News, Banking News and Updates on Live Mint. Check all the latest action on Budget 2024 here. Download The Mint News App to get Daily Market Updates.
More Less
Published: 28 Jun 2017, 03:36 PM IST
Next Story footLogo
Recommended For You
Banking Stocks
₹1,099.35-0.4%
₹1,431.15-0.05%
₹1,086.9-0.21%
₹124.850.76%
₹769.30.53%
Switch to the Mint app for fast and personalized news - Get App