General Motors and Ford, the world’s two largest auto-makers, both reported better-than-expected earnings last month. However, with US Federal Reserve Chairman Alan Greenspan hinting at an interest rate rise, credit analysts were mixed on the merits of these firms’ bonds.
Ford reported a more-than-double net earnings rise for the first quarter to $1.95bn, or 94 cents a share, from $896m, or 45 cents a share a year earlier. The company’s shares jumped 10% on the results while spreads on Ford Motor Credit Company’s 7% notes of 2013 narrowed by 7 basis points to 217 basis points, according to MarketAxess. This implies a modest improvement in investors’ risk perception.
