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CHRYSLER FINANCIAL SENIOR DEBT LOWERED TO 'BB+', OFF FITCHALERT -- FITCH FINANCIAL WIRE --

 CHRYSLER FINANCIAL SENIOR DEBT LOWERED TO 'BB+', OFF FITCHALERT
 -- FITCH FINANCIAL WIRE --
 NEW YORK, Jan. 21 /PRNewswire/ -- Ratings on $12.5 billion in Chrysler Financial Corp. (CFC) debt are lowered as follows: senior debt to 'BB+' from 'BBB' and subordinated debt to 'BB' from 'BBB-'. The commercial paper ratings of Chrysler Financial Corp. and Chrysler Credit Canada are lowered to 'F-S' from 'F-2' and withdrawn. The credit trend is uncertain. The ratings are removed from FitchAlert, where they were placed with negative implications on July 19, 1991. The securitized ratings of CFC-related transactions are unaffected by this action.
 While Chrysler Financial's fundamental operations have held up well in this recessionary environment, parent-related financial pressures are impairing the company's funding and financial flexibility, and increasingly, the outlook for its operations. CFC's inability to obtain debt funding through the capital markets heightens its dependence on banks to fund operating needs. CFC's inability to refinance its maturing term debt will force it to consider the sale of some of its better, non-automotive assets. It is likely that CFC will increasingly concentrate on automotive finance in the future, losing the benefit of diversity.
 Renegotiation and extension of the bank agreements, which expire in 1993, would eliminate the near-term uncertainty relating to the company's funding flexibility. However, if Chrysler Corp.'s financial condition remains weak, the legal and regulatory links between the two companies would continue to impair CFC's ability to obtain funds from the capital markets. Also new bank agreements are likely to be more expensive.
 Efforts to differentiate the credit characteristics of the finance company from its parent by either an initial public offering or partial sale of the company have not been successful. Should these actions be taken, and access to the capital markets restored, CFC would again be a prosperous, investment grade company. However, market conditions and parent company concerns have proven a significant obstacle up to this point.
 -0- 1/21/92
 /CONTACT: Nancy E. Stroker, CFA, of Fitch, 212-908-0533/
 (C) CO: Chrysler Financial Corp. ST: Michigan IN: FIN SU: RTG


JT -- NY119 -- 2035 01/21/92 16:21 EST
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Publication:PR Newswire
Date:Jan 21, 1992
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