Ford Motor (NYSE:F) received a boost Tuesday from Fitch Ratings. The global ratings agency upgraded Ford from junk bond status to investment grade, moving the rating from BB+ to BBB-, the first time Ford hasn’t been rated junk since 2005.
“Fitch believes that the work that has been accomplished has put the company in a solid position to withstand the significant cyclical and secular pressures faced by the global auto industry,” Fitch said in a press release.
Two other major rating agencies – Moody’s (NYSE:MCO) and McGraw-Hill‘s (NYSE:MHP) Standard & Poor’s — haven’t changed their ratings yet. Both organizations rate the second-largest U.S. automaker slightly lower than investment grade.
Ford, which was in great trouble just a few years ago, seemed to have turned a corner in late 2006 after Alan Mulally took the helm. Recently, Ford has pushed to sell more compact and midsized cars and get a bigger piece of China’s market.
Investors were quick to respond, buying up Ford newly upgraded debt on the news, The Wall Street Journal reported. Fitch now has a stable outlook on Ford’s debt. F shares were up a fraction (0.25%) in afternoon trading on Tuesday.