Moody's upgrades JLR to Ba2; outlook stable

Rating agency Moody's on Tuesday upgraded Jaguar Land Rover Automotive (JLR)'s corporate rating from 'Ba3' to 'Ba2' on strong and fairly stable credit profile.

JLR is a Tata Motors subsidiary based in the UK.

Concurrently, Moody's also upgraded JLR's senior unsecured notes to Ba2 with a loss given default assessment (LGD) of LGD4-52% from Ba3.

The outlook on all ratings is stable. "The upgrade to Ba2 was prompted by JLR's strong and fairly stable credit metrics over the past three years," said Falk Frey, Moody's senior vice-president and lead analyst for JLR.

JLR's strong results in the 2012-13 were driven by the company's broadened and competitive model line-up and its improved geographic presence in emerging markets, especially in China.

The improved performance is emerging markets helped JLR to compensate for the sluggish car demand in its home region, Europe.

"JLR's operating performance and financial ratios have been robust despite the continued challenging economic environment in Europe. This is positioning the company appropriately in the Ba2 rating category in our view," Moody's said in statement.

In the financial year ended March 2013, JLR reported another material increase in its volumes which stood at 3,74,636 vehicles and represented a 22 per cent rise compared with the previous year.

This is because of successful new model launches (for example, the new Range Rover) as well as growing demand for its SUVs such as the Range Rover Evoque and Freelander.