S&P ups Chrysler loan to 3

Standard & Poor's said it revised its recovery rating on Chrysler's $2 billion senior secured second-lien term loan due 2014, noting that the issue-level rating on this debt remains unchanged at B, the same level as the corporate credit rating on Chrysler, and the recovery rating was revised to 3 from 4.

Both the issue-level and recovery ratings on Chrysler's $7 billion first-lien term loan due 2013 remain unchanged, the agency said, adding that the issue-level rating on this debt is BB- with a recovery rating of 1.

"The revised recovery rating on the second-lien debt reflects Chrysler's reduction of outstanding borrowings under the first-lien term loan to $7.0 billion from $7.5 billion, using $500 million of cash that was previously restricted at DaimlerChrysler Financial Services Americas LLC," said S&P recovery analyst Olen Honeyman.

The agency said that the B corporate credit rating on Chrysler reflects the wide-ranging challenges the company faces in North America, where the vast majority of its automotive operations are located.

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