The credit ratings of Chrysler Group LLC are below those of rivals, Ford Motor Co. and General Motors Co., after it was assigned credit ratings below investment grade. The day after Chrysler posted its first quarterly profit since it emerged from bankruptcy in June 2009, Standard & Poor’s Ratings Services issued a B+ credit rating.
Saying that Chrysler’s outlook is positive, Moody's Investors Service Inc. gave it a B2 rating. S&P have assigned BB- ratings to Ford and GM.
In a statement, S&P credit analyst Robert Schulz said that the preliminary corporate credit rating is indicative of its evaluation of Chrysler's business risk profile as weak and its financial risk profile as aggressive.
Schulz said that Chrysler’s automotive operations will continue to be profitable if industry light-vehicle sales are kept higher than 12 million units. Chrysler is doing what it can to repay $7.6 billion in bailout loans that it was granted from the U.S. government as well as the federal and provincial governments of Canada.
Last Monday, Chrysler said that it will borrow $3.5 billion in a senior secured six-year term loan and $2.5 billion in secured bonds that will have eight- and 10-year maturities.
Moody’s gave Chrysler’s credit facilities a Ba2 rating due to predictions that Chrysler’s alliance with Fiat will enhance its operating performance, vehicle portfolio and financial results.
In a statement, Moody’s said that the Chrysler-Fiat cooperation in terms of purchasing, product development, platform sharing and international distribution may aid in the continued improvement of the operating and financial position of Chrysler beyond 2011.