Peugeot SA: Rating Report

On August 3, 2018, DBRS Limited (DBRS) confirmed the Issuer Rating of Peugeot SA (PSA or the Company) at BB (high). Concurrently, pursuant to DBRS Criteria: Recovery Ratings for Non-Investment Grade Corporate Issuers, DBRS also confirmed PSA’s Senior Unsecured Debt rating at BB (high), given the associated Recovery Rating of RR4, which remains unchanged. The trend on the ratings has been changed to Positive from Stable, recognizing the Company’s ongoing improvement in its earnings and cash flow generation. DBRS notes further that PSA’s earnings momentum (which incorporates not only ongoing cost reductions but also organic revenue growth) has not been meaningfully impeded by its 2017 acquisition of the Opel and Vauxhall (OV) automotive subsidiaries (from General Motors Company (GM; rated BBB with a Positive trend by DBRS), in addition to the acquisition of the associated financial services operations from General Motors Financial Company, Inc. (GM Financial)), the post-acquisition performance of which has been readily exceeding DBRS’s expectations. As such, the Company’s credit metrics and financial risk assessment (FRA) have improved to levels that exceed the currently assigned ratings.