Another positive step toward becoming a publicly traded stock again.
Standard & Poor’s Ratings Services said today that it assigned its preliminary “B+” corporate credit rating to Chrysler Group LLC. The rating outlook for what remain “junk bonds” for posing significant financial risk. The outlook is stable, though.
Concurrently Moody’s Investor Services assigned Chrysler a “B2” rating, also a junk rating or non-investment grade.
Nonetheless both ratings are likely sufficiently high enough to help Chrysler refinance its debt and ultimately take its stock public, perhaps later this year.
“The preliminary corporate credit rating reflects our assessment of Chrysler’s business risk profile as weak and its financial risk profile as aggressive,” said Standard & Poor’s credit analyst Robert Schulz.
“Under our criteria, the combination of these profiles is consistent with a ‘B+’ corporate credit rating. The stable outlook reflects our view that the company will remain profitable in its main North American market (around 90% of revenues) over the next year and generate some positive discretionary cash flow,” Schulz said.
“The issuance today by Moody’s of a B2 credit rating and ‘positive’ outlook, which follows Standard & Poor’s of a preliminary B+ credit rating on Chrysler Group LLC represents a further important step for the Company,” said Sergio Marchionne, CEO of Chrysler Group.
“As I previously stated, the results achieved in the first quarter of 2011 and the recently announced plans to repay the U.S. and Canadian governments further strengthen our commitment and determination to achieve, with rigor and discipline, all the targets set in the 2010-14 Chrysler Group business plan presented on November 4, 2009. So far, all of the goals have been reached and, in some cases, exceeded; evidence of the speed at which the Company has been able to realize its profound culture change,” Marchionne concluded in a written statement.
