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Bond Market News
Ford’s Bonds Drop After S&P Revises Outlook to Negative Upon Earnings Projection
February 10, 2025
Ford’s bonds dropped by up to 1 point across the curve after S&P revised its outlook on the company to negative. The negative outlook revision comes on the back of Ford’s guidance for weaker 2025 performance indicating that cost-reduction efforts have fallen short of expectations. Key issues include warranty defects, quality problems with supplier parts, manufacturing inefficiencies, and rising business complexities. These challenges, along with pricing pressures, particularly in the Ford Pro segment, will likely hamper growth in 2025. Although Ford has seen moderate success with its EV launches, the company is still navigating uncertainties around EV tax credits and adoption rates. Furthermore, costs tied to major US plant launches and slower progress in reducing losses from the Model E business are additional headwinds. As a result, Ford’s adjusted EBITDA margin is expected to remain below 7% in 2025, and its free operating cash flow is expected to decrease in 2025 and 2026, according to S&P.
Its 4.346% 2026s was down by 0.2 points to 98.16 cents on the dollar, yielding 5.41%.
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