Aug 30 -
Overview
-- On Aug. 27, 2012, we revised our outlook on Volkswagen AG (VW) to positive from stable and affirmed the 'A-/A-2' ratings.
-- Volkswagen Insurance Co. (VICO) qualifies as a captive insurer of parent VW under our criteria.
-- We are therefore revising our outlook on VICO to positive from stable and affirming our 'A-' ratings.
-- The rating actions are not due to any changes to the stand-alone characteristics of the company and are in lock step with its parent, VW.
-- The positive outlook reflects that on VW.
Rating Action
On Aug. 30, 2012, Standard & Poor's Ratings Services revised its outlook on Volkswagen Insurance Co. Ltd (VICO) to positive from stable. At the same time, we affirmed the 'A-' long-term counterparty credit and insurer financial strength ratings on VICO.
Rationale
The outlook revision and affirmation mirror the Aug. 27, 2012 rating action on VICO's parent, Volkswagen AG (VW; A-/Positive/A-2). The outlook revision on VW reflects the possibility that we may raise the rating on VW over the coming two years if the group's profit measures remain strong in the face of more challenging macroeconomic conditions and if credit ratios remain at the higher end of the "modest" category despite high capital expenditures.
As VICO qualifies as a captive insurer under our rating criteria, we rate it at the same level as its parent. The ratings on VICO will therefore move in lock step with those on VW.
The rating action and outlook revision on VICO are not due to any changes to the stand-alone characteristics of the company.
Outlook
The positive outlook on VICO reflects that on its parent, VW.
Related Criteria And Research
-- Interactive Ratings Methodology, April 22, 2009
-- Rating Captive Insurers, April 13, 2004
-- Use Of CreditWatch And Outlooks, Sept. 14, 2009
Ratings List
Ratings Affirmed; CreditWatch/Outlook Action
To From
Volkswagen Insurance Co. Ltd.
Counterparty Credit Rating
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