S&P cuts Volkswagen’s credit rating after emission scandal

Paris, October 12

International credit rating agency Standard and Poor’s today cut the long-term debt rating of German auto giant Volkswagen in the wake of the pollution-cheating scam involving its diesel vehicles.

S&P said it was downgrading VW’s long-term debt rating by one notch to A- and could cut it “by up to two more notches” again in future in face of the “wide-ranging negative credit consequences following its admission that it installed software designed to manipulate diesel engine exhaust emissions in 11 million vehicles.” “The downgrade reflects our assessment that VW has demonstrated material deficiencies in its management and governance and general risk management framework,” the analysts argued.

“We believe that VW’s breach of US environmental law and potential other laws outside the US represent a significant reputational and financial risk to VW over the medium term,” the S&P statement said. — AFP