Ford Motor Company hinted Thursday that it may reinstate its shareholder dividend before its debt rating is restored to investment grade status, despite its previous assertion that it would wait. Ford CFO Lewis Booth addressed Wall Street to update analysts on its newly signed labor agreement, and also dropped the dividend bombshell, surprising many who had taken the company at its word on its prior statements.
Ford does expect a debt upgrade in the coming months from both Moody's and Standard & Poor's due to its solid performance over the last few quarters and reduction of its overall outstanding debt. It is not known at this time, however, whether the agencies will raise the automaker's credit rating all the way up to investment grade. Ford suspended shareholder dividend payments back in September, 2006, before the entire industry was pummeled by the financial crisis.
“Our shareholders have been very patient and we will make a decision when think the company’s position allows it,” Booth said of the timing for restoring dividends. S&P and Moody's have each said that they may upgrade Ford's credit rating soon after it reached a new collective bargaining agreement with the United Auto Workers, and a new deal was approved Wednesday.