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The Blue Oval Returns - Ford Upgraded

|Includes: Ford Motor Company (F)

Moodys upgrades Ford and Ford Credit:

New York, May 22, 2012 -- Moody's Investors Service raised the senior unsecured ratings of Ford Motor Company (Ford) to Baa3 from Ba2 and Ford Motor Credit Company LLC (Ford Credit) to Baa3 from Ba1. Ford's Corporate Family and Probability of Default Ratings, as well as its Speculative Grade Liquidity rating, are withdrawn.

The rating of Ford's secured credit facility is lowered to Baa3 from Baa2 in anticipation of the imminent fall away of the bank agreement's security interest. This fall away, which would be consistent with the facility's terms, would result in any outstandings being pari passu with Ford's other senior unsecured debt.

The upgrade of Ford recognizes the strength of the company's position in North America, its robust liquidity position, and our expectation that the company will continue to embrace sound operating and financial disciplines. We believe that these strengths will enable Ford to maintain an investment grade profile in the face of the sector's ongoing cyclicality and weakness in the European market.

The upgrade of Ford Credit's ratings results from the upgrade of the Ford ratings. Ford Credit's strategic importance to Ford as a provider of critical dealer and consumer auto financing, as well as Ford's explicit and implicit support of Ford Credit tie Ford Credit's ratings to those of its parent. Based on the liquidity and capital positions of Ford and Ford Credit, Moody's estimates that Ford has the capacity to support Ford Credit to a level equivalent to the Baa3 rating. Ford Credit's stand-alone credit profile remains unchanged at a mid-Ba level.

The rating outlook for both Ford and Ford Credit is stable.

CDS 50 tighter. Way to go Ford and welcome back blue oval.

Disclosure: I am long F.