Ford shares surge on Volvo sale. Rating increased.

By Alan Fein

(AXcess News) New York - Shares of Ford Motor Co. (NYSE: F) surged following news of its sale of Volvo to Geely for $1.8 billion.  Rating agency Standard & Poor's raised Ford's rating two notches to "B+" as a result.

Geely paid Ford $1.3 billion in cash on Monday and

issued a note on the balance.  Ford shares surged 3% as a result, rising 39 cents to $13.16 as a result in mid-afternoon trading in New York.

S&P said the double-notch rating increase to "B+" was more the result of Ford's improved second quarter earnings picture.

Ford reported a second-quarter profit, including a pretax margin of 11.2% in its North American automotive operations and positive operating cash flow from its global automotive operations.

"We believe that as a gradual market recovery continues in North America, Ford's global automotive operations will generate at least low-single-digit pretax margins and positive operating cash flow in 2010, with potential for improvement in 2011", S&P noted in commenting on its ratings increase.  "We are raising our corporate credit rating on Ford to 'B+' from 'B-", as a result.

Ford's CEO Alan Mulally commented on the Volvo sale's finalization saying, "We are confident Volvo has a solid future under Geely's ownership."

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