Ford Motor Credit Company LLC -- Moody's affirms Ford Credit's ratings (long-term senior unsecured Ba2) and changes outlook to stable from negative, following similar actions on the parent's ratings

Rating Action: Moody's affirms Ford Credit's ratings (long-term senior unsecured Ba2) and changes outlook to stable from negative, following similar actions on the parent's ratingsGlobal Credit Research - 29 Mar 2021New York, March 29, 2021 -- Moody's Investors Service, ("Moody's") affirmed its ratings for Ford Motor Credit Company LLC (Ford Credit) and its subsidiaries, including the Ba2 long-term senior unsecured rating and Not Prime short-term ratings. The outlook was changed to stable from negative.The rating actions follow similar actions on the ratings for Ford Credit's parent, Ford Motor Company (Ford, Ba2 corporate family rating, stable), consistent with Moody's Methodology of Captive Finance Subsidiaries of Nonfinancial Corporations. This is based on Ford Credit's strategic significance to its parent, Moody's expectation that Ford would support Ford Credit, if required, as well as the explicit support agreement in place between the two companies. Please see separate press release dated 29 March 2021.Affirmations:..Issuer: Ford Motor Credit Company LLC....Commercial Paper, Affirmed NP....Backed Commercial Paper, Affirmed NP....Senior Unsecured Medium-Term Note Program (Local Currency), Affirmed (P)Ba2....Senior Unsecured Medium-Term Note Program (Foreign Currency), Affirmed (P)Ba2....Other Short Term (Local Currency), Affirmed (P)NP....Other Short Term (Foreign Currency), Affirmed (P)NP....Backed Senior Unsecured Medium-Term Note Program, Affirmed (P)Ba2....Senior Unsecured Regular Bond/Debenture (Local Currency), Affirmed Ba2....Senior Unsecured Regular Bond/Debenture (Foreign Currency), Affirmed Ba2....Senior Unsecured Shelf, Affirmed (P)Ba2....Subordinate Shelf, Affirmed (P)Ba3..Issuer: FCE Bank plc....Senior Unsecured Bank Credit Facility, Affirmed Ba2....Backed ST Deposit Note/CD Program (Foreign Currency), Affirmed NP....Commercial Paper (Foreign Currency), Affirmed NP....Senior Unsecured Medium-Term Note Program (Foreign Currency), Affirmed (P)Ba2....Other Short Term (Foreign Currency), Affirmed (P)NP....Senior Unsecured Regular Bond/Debenture (Local Currency), Affirmed Ba2....Senior Unsecured Regular Bond/Debenture (Foreign Currency), Affirmed Ba2..Issuer: Ford Credit Canada Company....Backed Commercial Paper, Affirmed NP....Backed Senior Unsecured Medium-Term Note Program (Local Currency), Affirmed (P)Ba2....Backed Senior Unsecured Medium-Term Note Program (Foreign Currency), Affirmed (P)Ba2....Backed Senior Unsecured Regular Bond/Debenture, Affirmed Ba2....Backed Senior Unsecured Shelf, Affirmed (P)Ba2Outlook Actions:..Issuer: Ford Motor Credit Company LLC....Outlook, Changed to Stable from Negative..Issuer: FCE Bank plc....Outlook, Changed to Stable from Negative..Issuer: Ford Credit Canada Company....Outlook, Changed to Stable from NegativeRATINGS RATIONALEFord Credit's unchanged ba2 standalone assessment takes into consideration the company's well managed portfolio asset quality, adequate capital cushion that protects its creditors against unexpected losses, and good liquidity supported by its operating model. Ford Credit is the only rated auto captive firm that has a relatively limited lease portfolio (20% of managed assets as of 31 December 2020) making it less vulnerable to a rapid decline of used car prices than peers. Moody's expects that Ford Credit's net receivables ($132 billion as of 31 December 2020) will moderately increase by low single digits in the next 12 months. This assumes that the company will maintain an overall penetration rate of around 60%, broadly in line with historical figures. Moody's believes that Ford Credit will manage its debt to equity leverage to within its historical range (9.8x as of 31 December 2020), given its consistent distribution strategies. Credit challenges for Ford Credit include its exposure to the performance trends of its parent and its significant use of securitization, reducing the company's alternate sources of liquidity.Ford Credit's liquidity position is good and totaled $35.4 billion as of 31 December 2020, comprising $14.6 billion of cash (net of $3.9 billion of cash reserves held for ABS facilities), $18.8 billion from committed asset backed facilities (excluding capacity in excess of eligible receivables), and $2.0 billion under other unsecured credit facilities ($2.5bn capacity).Ford Credit's ba2 standalone assessment is line with the rating of its parent Ford. The stable outlook on Ford Credit was prompted by similar actions taken on the ratings for its ultimate parent Ford. Ford's improved credit profile will have positive implications for Ford Credit's access to funding and its financing volumes. Ford's support to Ford Credit is evidenced by a support agreement under which Ford Credit can require Ford to inject capital to restore leverage below an 11.5x debt to equity threshold, should Ford Credit exceed the threshold.FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGSThe ratings could be upgraded if the ratings for Ford are upgraded.A material decline in asset quality and profitability beyond Moody's current expectations, diminished liquidity, or leverage as measured by tangible common equity over tangible managed assets to less than 8% could lead to lower standalone assessment for Ford Credit. Ford Credit's ratings could be downgraded if Ford's ratings are downgraded.The methodologies used in these ratings were Finance Companies Methodology published in November 2019 and available at https://www.moodys.com/researchdocumentcontentpage.aspx?docid=PBC_1187099, and Captive Finance Subsidiaries of Nonfinancial Corporations published in August 2019 and available at https://www.moodys.com/researchdocumentcontentpage.aspx?docid=PBC_1183459. Alternatively, please see the Rating Methodologies page on www.moodys.com for a copy of these methodologies. Ford Credit is an indirect, wholly owned subsidiary of Ford Motor Company. Ford Credit had a $132 billion portfolio of finance receivables and operating leases offered through two segments: consumer and non-consumer as of 31 December 2020. The consumer segment comprises products offered to individuals and businesses for the acquisition of Ford and Lincoln vehicles from dealers, in the form of retail installment sales and lease contracts. The non-consumer segment comprises primarily of wholesale loans offered to auto dealers.REGULATORY DISCLOSURESFor further specification of Moody's key rating assumptions and sensitivity analysis, see the sections Methodology Assumptions and Sensitivity to Assumptions in the disclosure form. Moody's Rating Symbols and Definitions can be found at: https://www.moodys.com/researchdocumentcontentpage.aspx?docid=PBC_79004.For ratings issued on a program, series, category/class of debt or security this announcement provides certain regulatory disclosures in relation to each rating of a subsequently issued bond or note of the same series, category/class of debt, security or pursuant to a program for which the ratings are derived exclusively from existing ratings in accordance with Moody's rating practices. For ratings issued on a support provider, this announcement provides certain regulatory disclosures in relation to the credit rating action on the support provider and in relation to each particular credit rating action for securities that derive their credit ratings from the support provider's credit rating. For provisional ratings, this announcement provides certain regulatory disclosures in relation to the provisional rating assigned, and in relation to a definitive rating that may be assigned subsequent to the final issuance of the debt, in each case where the transaction structure and terms have not changed prior to the assignment of the definitive rating in a manner that would have affected the rating. For further information please see the ratings tab on the issuer/entity page for the respective issuer on www.moodys.com.For any affected securities or rated entities receiving direct credit support from the primary entity(ies) of this credit rating action, and whose ratings may change as a result of this credit rating action, the associated regulatory disclosures will be those of the guarantor entity. Exceptions to this approach exist for the following disclosures, if applicable to jurisdiction: Ancillary Services, Disclosure to rated entity, Disclosure from rated entity.The ratings have been disclosed to the rated entity or its designated agent(s) and issued with no amendment resulting from that disclosure.These ratings are solicited. Please refer to Moody's Policy for Designating and Assigning Unsolicited Credit Ratings available on its website www.moodys.com.Regulatory disclosures contained in this press release apply to the credit rating and, if applicable, the related rating outlook or rating review.Moody's general principles for assessing environmental, social and governance (ESG) risks in our credit analysis can be found at https://www.moodys.com/researchdocumentcontentpage.aspx?docid=PBC_1243406.The Global Scale Credit Rating on this Credit Rating Announcement was issued by one of Moody's affiliates outside the EU and is endorsed by Moody's Deutschland GmbH, An der Welle 5, Frankfurt am Main 60322, Germany, in accordance with Art.4 paragraph 3 of the Regulation (EC) No 1060/2009 on Credit Rating Agencies. Further information on the EU endorsement status and on the Moody's office that issued the credit rating is available on www.moodys.com.The Global Scale Credit Rating on this Credit Rating Announcement was issued by one of Moody's affiliates outside the UK and is endorsed by Moody's Investors Service Limited, One Canada Square, Canary Wharf, London E14 5FA under the law applicable to credit rating agencies in the UK. Further information on the UK endorsement status and on the Moody's office that issued the credit rating is available on www.moodys.com.Please see www.moodys.com for any updates on changes to the lead rating analyst and to the Moody's legal entity that has issued the rating.Please see the ratings tab on the issuer/entity page on www.moodys.com for additional regulatory disclosures for each credit rating. Inna Bodeck Vice President - Senior Analyst Financial Institutions Group Moody's Investors Service, Inc. 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