S&P ups Chrysler rating to match Fiat on VEBA deal

Related Topics

Ratings agency Standard & Poor’s Financial Services has raised its rating of Chrysler Group one notch to BB- to match that of its corporate parent, Fiat.

The ratings upgrade from B+ comes as a direct result of Fiat’s agreement to acquire the remaining outstanding stock in Chrysler from the UAW Retiree Health Care trust, known as the VEBA, S&P explained.

BB- is three levels below what S&P considers investment grade.

The $4.35 billion transaction was announced by Fiat on Jan. 1, and is expected to be complete on or around Jan. 20.

S&P said that completion of the transaction for VEBA’s 41.5 percent stake would make Chrysler a “core” subsidiary of Fiat under its rating methodology. S&P reaffirmed its BB- rating of Fiat today.

On Tuesday, rival ratings agency Moody’s placed Fiat’s rating under review for a possible downgrade to reflect the impact on the Italian automaker’s cash position of its plans to take full control of Chrysler Group.

You can reach Larry P. Vellequette at lvellequette@crain.com.


advertising
Have an opinion about this story? Click here to submit a Letter to the Editor, and we may publish it in print.

Or submit an online comment below. (Terms and Conditions)


Newsletters & Alerts
Latest Headlines