A successful merger of Fiat Chrysler Automobiles NV with French carmaker PSA Group could be the ticket for a boost to an investment-grade credit rating.

Moody’s Investors Service said Monday it’s bumping its outlook for the Italian-American automaker’s rating up to positive, citing the accord the company reached with PSA last week to create the world’s fourth-biggest car manufacturer. Moody’s rates Fiat Chrysler Ba1, the highest junk grade.

“The merger would create a larger and more diversified global auto manufacturer with substantial synergy and efficiency potential, which will help to mitigate multiple challenges within the global automotive manufacturing industry,” Moody’s analyst Falk Frey wrote in a statement. “Its successful execution could result in a rating upgrade for FCA, assuming no further deterioration of the global automotive industry environment in 2020.”

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The merger would boost Fiat Chrysler’s market share globally, save the company research and production costs and solve its “perceived weakness” in electrification, Frey wrote. He cautioned there are still “significant uncertainties” with regard to clinching the deal.

Fitch Ratings boosted Fiat Chrysler to investment grade in November 2018 citing strong cash flows as a result of better profits, less debt and a spinoff of components supplier Magneti Marelli. The automaker is planning to jettison its robotics arm Comau – worth an estimated 250 million euros ($279 million) – to shareholders as part of the PSA transaction.

S&P Global Ratings also has the highest junk grade on Fiat Chrysler and a positive outlook. If a second firm were to join Fitch in rating the company investment-grade, it would be eligible to join high-grade debt indexes.

With assistance from Molly Smith.

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