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Moody's rates Chrysler loan B1
Moody's Investors Service said it affirmed Chrysler Automotive LLC's B3 corporate family rating and the Caa1 (LGD4, 61%) rating of the company's $2 billion senior secured second-lien term loan.
Moody's also assigned a B1 (LGD3, 30%) rating to Chrysler's $7.5 billion senior secured first-lien term loan due 2013, which replaces a $5 billion senior secured first-lien/first-out term loan and a $5 billion senior secured first-lien/second-out term loan.
Moody's also said it affirmed the B1 corporate family rating of DaimlerChrysler Financial Services Americas LLC. The ratings are linked because of common ownership and control by the Cerberus-led buyout.
The outlook remains stable.
The B3 corporate family rating reflects the challenging operating environment and weak credit metrics that Chrysler will face during 2008 and 2009, the agency said.
The rating also reflects the significant longer-term benefits that will result from the recently ratified four-year United Auto Workers labor agreement and the prudent liquidity position the company should maintain to cover near-term operating and restructuring requirements, Moody's said.
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