Standard & Poor's on Monday downgraded Volkswagen AG's long-term rating by a single notch to A-minus from A and said it is keeping it on CreditWatch negative, and could downgrade it again in the near term by up to two more notches. The agency also lowered ratings on VW's core subsidiaries, including Volkswagen Financial Services AG and Volkswagen Bank GmbH, to A-minus from A, and cut the long-term issuer credit and financial strength ratings on its captive insurer Volkswagen Insurance Co. Ltd. "The downgrade reflects our assessment that VW has demonstrated material deficiencies in its management and governance and general risk management framework," S&P said in a statement. "We believe VW's internal controls have been shown to be inadequate in preventing or identifying alleged illegal behavior in the U.S. and misconduct in other regions." The move comes after VW admitted it used special software to falsify data in emissions testing of diesel-powered vehicles.
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