Moody's downgrades Volkswagen due to emissions scandal

Moody's has downgraded Volkswagen's debt due to the possible financial impact of the company's car emissions scandal.

Moody's Investors Service said Wednesday it had cut the rating on VW's long-term unsecured debt, short-term debt known as commercial paper, and subordinated notes issued by its finance arm and guaranteed by the company.

The credit ratings agency said in a statement that the downgrade "reflects mounting risks to Volkswagen's reputation and future earnings" following a company announcement on Tuesday that the company uncovered irregularities in carbon dioxide emissions levels.

Moody's also cited Monday's announcement by US authorities that software used to defeat US emissions testing had been found on more models than originally thought.