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Volvo Cars gets junk rating as bond offer hits the road

[STOCKHOLM] Sweden's Volvo Cars said Friday it received a junk credit rating from the Standard and Poor's agency as it seeks to sell 500 million euros (S$768.61 million) of bonds to investors.

S&P gave the company a "BB" rating, the highest note in the "speculative" category, but added a positive outlook.

Tapping the corporate bond market for the first time in its 89-year history, Volvo will begin presentations for investors on Monday, a process known as "roadshow".

Truck manufacturer Volvo Group in 1999 sold Volvo Cars to Ford, which then sold on the Swedish carmaker to China's Geely in 2010.

Volvo Cars this week reported a net profit of 2.07 billion kroner (US$345.86 million) for the first quarter on sales of 41.8 billion kroner.

The company, which makes no secret of its ambition to compete head-on with leading global high-end brands Audi, BMW, Mercedes-Benz and Jaguar, is aiming in 2016 to break last year's record 503,000 cars sold.

AFP