Chrysler Corp. & Unit's Ratings Raised; Off S&PWatch.NEW YORK--(BUSINESS WIRE)--Oct. 30, 1998--Standard & Poor's CreditWire 10/30/98 -- Standard & Poor's today raised its ratings on Chrysler Corp. and subsidiary Chrysler Financial Co. L.L.C. (formerly known as Chrysler Financial Corp.). The ratings were removed from CreditWatch, where they were placed May 6, 1998 following the announcement of Chrysler's planned merger with Daimler-Benz AG in an all-stock transaction (see list below). At the same time, Standard & Poor's affirmed af·firm v. af·firmed, af·firm·ing, af·firms v.tr. 1. To declare positively or firmly; maintain to be true. 2. To support or uphold the validity of; confirm. v.intr. its 'A-1' commercial paper rating on Chrysler Financial and its single-'A'-plus/'A-1' corporate credit ratings on Daimler-Benz. These ratings were not on CreditWatch. The outlook on all three companies is stable. The rating upgrades reflect Standard & Poor's expectations that the merger will be completed within the next month. With the announcement earlier this week that a sufficient number of tenders were received from shareholders of the two companies, all material impediments IMPEDIMENTS, contracts. Legal objections to the making of a contract. Impediments which relate to the person are those of minority, want of reason, coverture, and the like; they are sometimes called disabilities. Vide Incapacity. 2. to the transaction have been overcome. The merged company will be called DaimlerChrysler AG. The merger will unite two major players in the world automotive industry The automotive industry is the industry involved in the design, development, manufacture, marketing, and sale of motor vehicles. In 2006, more than 69 million motor vehicles, including cars and commercial vehicles were produced worldwide. . The companies' complementary product offerings and geographic concentrations afford the opportunity for considerable marketing benefits. In addition, potential efficiencies are substantial in such areas as parts procurement The fancy word for "purchasing." The procurement department within an organization manages all the major purchases. , product design, and joint manufacturing. However, DaimlerChrysler's management will face considerable challenges to fully realize potential benefits, and the rating does not take it for granted that these will come about in short order. Both companies have cash significantly in excess of debt (excluding finance operations The execution of the joint finance mission to provide financial advice and guidance, support of the procurement process, providing pay support, and providing disbursing support.See also financial management. , although these are also conservatively leveraged). A high degree of balance sheet strength is expected to be preserved. It has not been announced whether the existing debt of Chrysler and Chrysler Financial -- which will continue as legal entities -- will be guaranteed by DaimlerChrysler. In any event, Standard & Poor's views Chrysler, Chrysler Financial, and DaimlerChrysler as a single economic entity: the absence of a parental guarantee would not result in a different assessment of the credit quality of Chrysler and Chrysler Financial's debt. OUTLOOK: STABLE The intense competitiveness and cyclical cyclical Of or relating to a variable, such as housing starts, car sales, or the price of a certain stock, that is subject to regular or irregular up-and-down movements. characteristics of the auto industry and the challenges of a smooth transition between Chrysler and Daimler-Benz constrain con·strain tr.v. con·strained, con·strain·ing, con·strains 1. To compel by physical, moral, or circumstantial force; oblige: felt constrained to object. See Synonyms at force. 2. ratings upgrade potential over the next few years, Standard & Poor's said. -- CreditWire RATINGS RAISED AND REMOVED FROM CREDITWATCH Rating To From Chrysler Corp. Chrysler Financial Co. L.L.C. Corporate credit rating A+ A Senior unsecured debt Unsecured debt Debt that does not identify specific assets that the debtholder is entitled to in case of default. A+ A Bank loan rating A+ A Auburn Auburn (ô`bərn). 1 City (1990 pop. 33,830), Lee co., E Ala.; inc. 1839. The city's economy centers around Auburn Univ.; there is some manufacturing. 2 City (1990 pop. 24,309), seat of Androscoggin co. Hills Trust Senior unsecured debt* A+ A *Guaranteed by Chrysler Corp. |
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