This site uses cookies to provide you with a great user experience. By using BondbloX, you accept our use of cookies.
Bond Market News
Volkswagen Downgraded to Baa1 by Moody’s
March 18, 2025
Volkswagen was downgraded by a notch to Baa1 from A3 by Moody’s. The downgrade reflects declining operating margins and weak free cash flows for the company, with limited recovery expected in the next 12-18 months. Key challenges include global pricing pressure, geopolitical uncertainties, competition in China, and high investment needs, especially in software. Volkswagen’s EBITA margin fell to 5.7% in 2024 and its free cash flow turned negative due to high capital expenditures. Despite planned cost reductions and strategic shifts, profitability remains lower than peers. In China, Volkswagen’s market share has declined due to the rise of local brands and electric vehicles. The company is responding with new models but faces intense price competition. Volkswagen’s EV transition has been costly and slower than expected, though potential regulatory changes in Europe may provide some relief.
Volkswagen’s bonds traded stable with its 6% 2026s at 101.7, yielding 4.9%
For more details, click here
Go back to Latest bond Market News
Related Posts:
BondbloX Pte. Ltd. is regulated by the Monetary Authority of Singapore as a Recognised Market Operator ("RMO") and exempted from Section 49(1) of the Securities and Futures Act (Cap. 289) ("SFA") under Section 49(7) of the SFA.