Moody’s Investors Service announced that it has upgraded Ford Motor Company’s debt to investment grade, after Moody’s ranked the debts as junk in August 2005. That means Ford can now regain several trademarks mortgaged in 2006 — including the iconic Blue Oval.
In December 2006, Ford raised $23.5 billion in liquidity thanks to taking out lots of credit facilities, which included mortgaging several important trademarks including the Blue Oval, F-150, Mustang, and others. Doing so helped keep Ford afloat during the economic downturn, meaning the company could avoid bankruptcy and thus didn’t take bailout money from the federal government.
The decision was a big gamble that appears to have paid off. By fall 2011, Ford had completely paid back its loans and was completing its third year of increased operating profits. Earlier this year, Ford paid its first dividend since 2006, and the company posted its 11th consecutive quarter of pre-tax profits.
According to Automotive News, Moody’s expects Ford to continue to manage its finances successfully, and believes the automaker can maintain its investment-grade rating even as the European auto industry faces a downturn. “Improvements Ford has made are likely to be lasting,” the investment group said. In April of this year, investment group Fitch Ratings also upgraded Ford to investment grade; Standard & Poor’s, however, still ranks Ford below investment grade.
“When we pledged the Ford Blue Oval as part of the loan package, we were not just pledging an asset. We pledged our heritage,” Ford executive chairman Bill Ford Jr. said in a statement. “Getting the Ford Blue Oval back feels amazing, and it is one of the best days that I can remember.”
Sources: Ford, Automotive News