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Fitch Raises VW Debt Rating to “Stable”
Fitch Ratings has raised its outlook for Volkswagen AG debt to “stable” from “negative” after concluding that risks associated with the carmaker’s diesel emission cheating scandal now appear to be clearly defined.
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Fitch Ratings has raised its outlook for Volkswagen AG debt to “stable” from “negative” after concluding that risks associated with the carmaker’s diesel emission cheating scandal now appear to be clearly defined.
The rating service, which lowered its VW rating from A in November 2015, did not change its current BBB+ rating for VW’s long-term debt. Under Fitch’s ratings, BBB+ is three steps above non-investor-grade “junk” status.
VW so far has allocated €22.6 billion ($25.7 billion) to cover fines, repairs and customer compensation payments associated with some 11 million diesel-power vehicles it rigged to evade emission laws. Most payouts will occur in 2019-2020, according to the rating service.
Fitch praises the carmaker’s financial resilience since the cheating was revealed in September 2015. The service estimates VW could cover “several billion euros” of additional scandal-related payments without eroding its current rating.
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