Mexico, March 30, 2021 -- Moody's de México ("Moody's") has today affirmed Ford Credit de
Mexico, SA de CV, SOFOM, ER's (Ford Credit de México)
backed short-term Mexican National Scale senior unsecured debt
program rating of MX-1 and backed short-term global local
currency senior unsecured debt program rating of Not Prime. In
addition, Ford Credit de Mexico's rating outlook was changed
to stable, from negative.
The following ratings of Ford Credit de Mexico, SA de CV,
SOFOM, ER (600065473) were affirmed:
..Backed short-term Mexican National Scale senior
unsecured debt program rating of MX-1
..Backed short-term global local currency senior
unsecured debt program rating of Not Prime
Outlook action: Outlook changed to stable, from negative.
The affirmation of Ford Credit de México's program ratings and
the change in outlook to stable, from negative, follows the
affirmation of the ratings of Ford Motor Credit Company LLC (FMC,
senior unsecured rating of Ba2, stable outlook) with a stable outlook
on 29 March 2021, which, in turn, follows a similar
action on its own parent, Ford Motor Company (Ford, senior
unsecured debt ratings of Ba2, stable), on the same date.
For further details and rationale on the actions on Ford and FMC,
please refer to their press releases "Moody's affirms Ford's Ba2 senior
unsecured and corporate family ratings; Outlook changed to stable."
and "Moody's affirms Ford Credit's ratings (long-term senior unsecured
Ba2) and changes outlook to stable from negative, following similar
actions on the parent's ratings" (https://www.moodys.com/research/Moodys-affirms-Ford-Credits-ratings-long-term-senior-unsecured-Ba2--PR_443275),
Ford Credit de México's ratings reflect a full, irrevocable
and unconditional guarantee (i.e. credit substitution) from
FMC to any issuance under the company's long- and short-term
revolving debt program (Programa de Certificados Bursátiles de
Corto y Largo Plazo con Carácter Revolvente) of up to MXN20 billion
dated September 2016. The terms and conditions of the parental
guarantee fulfill eight of Moody's nine core principles for credit substitution,
namely (i) it is irrevocable and unconditional; (ii) it promises
full and timely payment of the underlying obligations; (iii) it covers
payment -- not merely collection; (iv) it covers preference
payments, fraudulent conveyance charges, and other payments
that have been rescinded, repudiated, or "clawed back";
(v) the guarantor waives all defenses; (vi) its term extends as long
as the term of the underlying obligation; (vii) it is enforceable
against the guarantor, and (viii) it is governed under New York
law, a jurisdiction hospitable to the enforcement of guarantees.
The guarantee does not satisfy one of Moody's core principles of Credit
Substitution, specifically that the transfer, assignment or
amendment of the guarantee by the guarantor should only be permissible
if it does not result in a deterioration of the credit support provided
by the guarantee. Nevertheless, this weakness is offset by
the strategic fit and importance of Ford Credit de México's operation
for FMC and Ford, the fact that the companies share the name,
and the reputational risk that a default by Ford Credit de México
would represent for FMC and Ford.
Ford Credit de México's debt ratings are based upon FMC's guarantee,
and therefore, the outlook was changed to stable, from negative,
in line with the outlook on FMC's ratings.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
Because Ford Credit de México's debt is guaranteed by Ford Motor
Credit, its ratings will be upgraded if the ratings of FMC are upgraded.
In turn, Ford Credit de México's ratings will be downgraded
if the ratings of FMC are downgraded.
The principal methodology used in these ratings was Rating Transactions
Based on the Credit Substitution Approach: Letter of Credit-backed,
Insured and Guaranteed Debts published in May 2017 and available at https://www.moodys.com/researchdocumentcontentpage.aspx?docid=PBC_1068154.
Alternatively, please see the Rating Methodologies page on www.moodys.com.mx
for a copy of this methodology.
The period of time covered in the financial information used to determine
Ford Credit de Mexico, SA de CV, SOFOM, ER's rating
is between 1 January 2016 and 30 September 2020 (source: Financial
Audited Statements 2016, 2017, 2018, 2019, Financial
Interim Statements Q3 2020).
Moody's National Scale Credit Ratings (NSRs) are intended as relative
measures of creditworthiness among debt issues and issuers within a country,
enabling market participants to better differentiate relative risks.
NSRs differ from Moody's global scale credit ratings in that they are
not globally comparable with the full universe of Moody's rated entities,
but only with NSRs for other rated debt issues and issuers within the
same country. NSRs are designated by a ".nn"
country modifier signifying the relevant country, as in ".za"
for South Africa. For further information on Moody's approach to
national scale credit ratings, please refer to Moody's Credit rating
Methodology published in May 2016 entitled "Mapping National Scale Ratings
from Global Scale Ratings". While NSRs have no inherent absolute
meaning in terms of default risk or expected loss, a historical
probability of default consistent with a given NSR can be inferred from
the GSR to which it maps back at that particular point in time.
For information on the historical default rates associated with different
global scale rating categories over different investment horizons,
please see https://www.moodys.com/researchdocumentcontentpage.aspx?docid=PBC_1216309.
For further specification of Moody's key rating assumptions and
sensitivity analysis, see the sections Methodology Assumptions and
Sensitivity to Assumptions in the disclosure form. Moody's
Rating Symbols and Definitions can be found at: https://www.moodys.com/researchdocumentcontentpage.aspx?docid=PBC_79004.
Information sources used to prepare the rating are the following:
parties involved in the ratings, parties not involved in the ratings,
public information, and confidential and proprietary Moody's
The ratings have been disclosed to the rated entity prior to public dissemination.
A general listing of the sources of information used in the rating process,
and the structure and voting process for the rating committees responsible
for the assignment and monitoring of ratings can be found in the Disclosure
tab in www.moodys.com.mx.
The date of the last Credit Rating Action was 26/3/2021.
For ratings issued on a program, series, category/class of
debt or security this announcement provides certain regulatory disclosures
in relation to each rating of a subsequently issued bond or note of the
same series, category/class of debt, security or pursuant
to a program for which the ratings are derived exclusively from existing
ratings in accordance with Moody's rating practices. For ratings
issued on a support provider, this announcement provides certain
regulatory disclosures in relation to the credit rating action on the
support provider and in relation to each particular credit rating action
for securities that derive their credit ratings from the support provider's
credit rating. For further information please see the ratings tab
on the issuer/entity page for the respective issuer on www.moodys.com.mx.
For any affected securities or rated entities receiving direct credit
support from the primary entity(ies) of this credit rating action,
and whose ratings may change as a result of this credit rating action,
the associated regulatory disclosures will be those of the guarantor entity.
Exceptions to this approach exist for the following disclosures,
if applicable to jurisdiction: Ancillary Services, Disclosure
to rated entity, Disclosure from rated entity.
This credit rating is subject to upgrade or downgrade based on future
changes in the financial condition of the Issuer/Security, and said
modifications will be made without Moody's de México S.A.
de C.V accepting any liability as a result.
Regulatory disclosures contained in this press release apply to the credit
rating and, if applicable, the related rating outlook or rating
Moody's general principles for assessing environmental, social
and governance (ESG) risks in our credit analysis can be found at https://www.moodys.com/researchdocumentcontentpage.aspx?docid=PBC_1243406.
Moody's considers the quality of information available on the rated entity,
obligation or credit satisfactory for the purposes of issuing a rating.
Moody's adopts all necessary measures so that the information it uses
in assigning a rating is of sufficient quality and from sources Moody's
considers to be reliable including, when appropriate, independent
third-party sources. However, Moody's is not an auditor
and cannot in every instance independently verify or validate information
received in the rating process.
Please see Moody's Rating Symbols and Definitions on www.moodys.com.mx
for further information on the meaning of each rating category and the
definition of default and recovery.
Please see ratings tab on the issuer/entity page on www.moodys.com.mx
for the last rating action and the rating history. The date on
which some ratings were first released goes back to a time before Moody's
ratings were fully digitized and accurate data may not be available.
Consequently, Moody's provides a date that it believes is the most
reliable and accurate based on the information that is available to it.
Please see our website www.moodys.com.mx for further
Please see www.moodys.com.mx for any updates on changes
to the lead rating analyst and to the Moody's legal entity that has issued
The ratings issued by Moody's de Mexico are opinions regarding the credit
quality of securities and/or their issuers and not a recommendation to
invest in any such security and/or issuer.
Please see the ratings tab on the issuer/entity page on www.moodys.com.mx
for additional regulatory disclosures for each credit rating.
Rodrigo Marimon Bernales
Financial Institutions Group
JOURNALISTS: 1 800 666 3506
Client Service: 1 212 553 1653
M. Celina Vansetti-Hutchins
MD - Banking
Financial Institutions Group
JOURNALISTS: 1 212 553 0376
Client Service: 1 212 553 1653
Moody's de Mexico S.A. de C.V
Ave. Paseo de las Palmas
No. 405 - 502
Col. Lomas de Chapultepec
Mexico, DF 11000
JOURNALISTS: 1 888 779 5833
Client Service: 1 212 553 1653