DETROIT (Bloomberg) -- Ford Motor Co. had its corporate credit rating raised by Standard & Poor’s Ratings Service after the automaker reported its largest annual profit in 11 years.
The rating was increased one level to BB- from B+, S&P said in a statement on Tuesday. The rating is three levels below investment grade. The outlook on the rating is positive, S&P said.
Ford reduced its automotive debt, which excludes Ford Motor Credit, by 43 percent to $19.1 billion at the end of 2010 from a year earlier. The company’s rating may be raised again within 12 months if the global economic recovery continues, its performance improves and it reaches a favorable resolution to its contract talks with the UAW, S&P said.
“As the market recovery continues in North America, Ford’s global automotive operations will generate at least mid-single digit pretax margins and positive automotive operating cash flow,” Robert Schulz, an S&P analyst, said in the statement. “There is at least a one-in-three chance that we could raise Ford’s corporate credit rating during the next 12 months.”
Earlier Tuesday, Ford said its U.S. sales rose 9.2 percent in January. Last week, Ford reported 2010 net income of $6.56 billion, the most since 1999.