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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.

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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.