Creditreform Rating has affirmed the unsolicited corporate issuer rating of BMW AG as well as the unsolicited corporate issuer rating of BMW Finance N.V. at A. Creditreform Rating has also affirmed the unsolicited corporate issue rating of the long-term local currency senior unsecured notes issued by BMW Finance N.V. at A. These issues are included in the list of ECB-eligible marketable assets, which can be found on the ECB's website. The outlook for the ratings remains negative. For more details regarding the ratings, please refer to our press release below.
Creditreform Rating confirmed the unsolicited corporate issuer rating of BMW Finance N.V. at A. The outlook remains negative. BMW Finance N.V.'s activity is the provision of financial activities to the BMW AG. Due to the financial, liability and corporate law relationship to BMW AG the unsolicited corporate issuer rating of BMW Finance N.V. equals the unsolicited corporate issuer rating of BMW AG, which is A / negative.
Creditreform Rating amended the corporate issuer rating of BMW AG, BMW Finance N.V. and the rating of the long-term currency (LC) senior unsecured issues from A + / negative to A / negative as part of the monitoring process during the year.
The main reasons for this are the current macroeconomic upheavals, which CRA believes are increasingly the result of the COVID-19-pandemic and could affect the BMW Group to a considerable extent. This is particularly the case considering the temporary plant closings and the associated production stoppages, which can lead to significant sales and earnings losses. The duration of the plant closings is currently not foreseeable. As part of its periodic reviews, CRA examines further negative implications on the net assets-, financial- and earnings position of the BMW Group.
Creditreform Rating has set BMW AG's unsolicited corporate issuer rating to A +. The outlook is negative and reflects the company's own expectations regarding a further decline in earnings for the 2019 financial year, which could also be confirmed in 2020. With the unsolicited corporate issuer rating, BMW AG continues to have a high level of creditworthiness and a low default risk. The operational and financial performance of the BMW Group is decisive for the rating assessment, which is satisfactory despite the deterioration in earnings quality, high levels of competition, technological change and capital intensity of the business. The BMW Group's long-established capital market capability has a stabilizing effect. The reduction in sales and the significantly declining annual result in 2018 have a negative effect on our rating assessment.
Creditreform Rating has carried out an unsolicited corporate issuer rating of BMW Finance N.V. The rating has been set to A+ with stable outlook.