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CHRYSLER FINANCIAL CORP. COMMERCIAL PAPER RATED 'F-3' BY FITCH -- FITCH FINANCIAL WIRE --

 NEW YORK, May 11 /PRNewswire/ -- Chrysler Financial Corp.'s (FCC) commercial paper program is rated 'F-3' by Fitch. The company's 'BB+' senior debt and 'BB' subordinated debt ratings are affirmed. The credit trend remains stable.
 CFC's operations continue to be strong and parent-related funding and financial pressures have abated. CFC has downsized dramatically through asset sales and securitizations and is now almost entirely focused on retail and wholesale automotive lending to support Chrysler product sales. Absolute earnings have declined with the business dispositions, but profitability has held up. The company's first-quarter 1993 ROA was 0.87 percent before accounting charges, below historical levels but still healthy and sustainable.
 The company's balance sheet also is very strong, in part because of limitations imposed by banks when the facilities were negotiated in 1992. The debt/equity ratio is down to a very low 3.37 times, and dividends to the parent will not be permitted under the current agreement. As another condition of the bank facility, all debt is secured on a pari passu basis by the assets of CFC, with $10.1 billion of debt outstanding against $10.2 billion of on balance sheet receivables, the largest and most liquid asset type. CFC continues to borrow from banks, with $3.5 billion outstanding against $10.5 billion of total facilities. Some of the commitments will expire in early 1994, but the largest component will be outstanding until August 1995. CFC has also regained access to the public capital markets, with $650 million of long-term underwritten debt sold since December 1992, and the reinstatement of its medium- term note program. Commercial paper also is up, to $1.5 billion at March 31 from $352 million at year end. The company's financial flexibility is greatly improved with its broader access to funds.
 CFC's retail and wholesale automotive asset quality remains strong. The non-automotive receivables, which represent 31 percent of on balance sheet receivables, have a fairly high nonperforming loan percentage, but chargeoffs have been below 1 percent for the past two years and the equity and reserve cushion is substantial.
 Longer term, the primary concern is CFC's ownership by Chrysler Corp., which is concurrently being upgraded to 'BB+' from 'BB-'. With the sale of most of the non-automotive businesses, CFC is more reliant on Chrysler's performance. Also, as a joint and several obligor for Chrysler's pension obligations, CFC could be exposed. However, the unfunded obligation is down to $2.8 billion from $4.4 billion, with further rapid progress expected.
 -0- 5/11/93
 /CONTACT: Nancy E. Stroker, CFA, 212-908-0533, of Fitch/
 (C)


CO: Chrysler Financial Corp.; Chrysler Corp. ST: Michigan IN: AUT FIN SU: RTG

LR -- NY044 -- 7033 05/11/93 11:54 EDT
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Publication:PR Newswire
Date:May 11, 1993
Words:452
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