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MOODY’S: NO CREDIT UPGRADE FOR TOYOTA THIS YEAR

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MOODY’S: NO CREDIT UPGRADE FOR TOYOTA THIS YEAR

By Andrew Ganz

Moody’s Investors Service says that despite recall-plagued Toyota’s intention of posting a profit this year, it doesn’t plan to increase the automaker’s credit rating during this fiscal year.

“I cannot say confidently that Toyota’s operating profit will recover smoothly,” Moody’s senior analyst Tadashi Usui said.

Toyota is currently rated Aa2 – far higher than most automakers, but still lower than the Aa1 it started the year with. Toyota started 2009 with Moody’s highest rating, Aaa – an unusually high rating for an automaker.

Although Toyota said that it plans to post a profit this year, the number is down about 90 percent from the automaker’s record-breaking profit in 2008. Moody’s says that Toyota needs an operating profit of about $1 trillion yen ($11 billion) with an operating margin of 5 percent before it could be considered for a rating bump.

Not alone

Moody’s said that Toyota isn’t alone among automakers in needing to boost its profitability and its margins. Although it recently boosted Ford’s rating, it said that Honda needs a 7 percent margin to increase from A1 and Nissan needs a 5 percent margin to increase from Baa2.

Moody’s raised Ford to B1 last week. General Motors and Chrysler are not rated because they are not publicly traded.

link:

http://www.leftlanenews.com/moodys-no-credit-upgrade-for-toyota-this-year.html

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