Moody’s rates Fiat Chrysler ‘B1’ with ‘stable outlook’
Fiat Chrysler Automobiles NV was assigned a “B1” rating on Wednesday by Moody’s Investors Service.
The rating, which includes a “stable outlook” for the new company, came two days after Fiat Chrysler was listed on the New York Stock Exchange.
“B” ratings are considered speculative and are subject to high credit risk, according to Moody’s. It is the same rating Italian automaker Fiat SpA, which owned Chrysler Group LLC before merging into FCA on Sunday, was rated by the bond credit rating business.
Moody’s said the B1 rating is constrained by FCA’s “weak credit metrics (excluding Chrysler) with limited improvement expected in 2014”; reliance on the European market; eroding profitability in Latin America; and other unstable outlooks.
FCA could gain a better rating, according to Moody’s, by achieving positive free cash flow exceeding 1 billion euros (about $1.28 billion) and generating significantly more than 4 billion euros ($5.1 billion) before interest, taxes and special items in 2014.
FCA [NYSE: FCAU] shares as of 2:45 p.m. Wednesday were down 3.4 percent to $8.64 a share. The stock debuted at $9 per share on Monday.