Moody's lowers Renault's rating from Ba1 to Ba2, and the default probability rating from Bai-Pd to Ba2-Pd, with a negative outlook. Instead, the FCA rating at Ba1 and Ba1-Pd confirms the probability of default, with the outlook changing to under observation with uncertain direction. For Psa Moody's confirms Peugeot's Baa3 rating and the outlook becomes negative. The rating agency also confirms that of Volvo at Ba1, but the outlook has been changed to negative.
Moody's motivates the lower rating for Renault with the estimate that "the recession caused by the coronavirus will cause a marked weakening in credit metrics. We expect - it is explained - that during 2020 the adjusted margin could drop below -3% , compared to an already very weak 0.8% in 2019 ". A positive note is reported in the "company restructuring program, an adequate way to deal with the weakness of profitability and improve competitiveness". For FCA, the rating agency positively assesses the company's liquidity and the loan request with Sace guarantee. The same for Psa and Volvo's liquidity, but the outlook opinion reflects the potentially serious impact that coronavirus could have on operational performance and credit metrics in 2021.