Moody's: DaimlerChrysler Financial outlook negative

Moody's Investors Service said it revised the outlook of DaimlerChrysler Financial Services Americas LLC to negative from stable, while affirming the firm's B1 corporate family rating.

The agency said the negative outlook reflects operating concerns at auto manufacturing affiliate Chrysler LLC. DaimlerChrysler Financial's ratings and outlook are linked to Chrysler's, reflecting the common ownership of the two companies, as well as DaimlerChrysler Financial's significant business connections with Chrysler and its dealers.

The change in outlook also incorporates increasing stresses on DaimlerChrysler Financial's asset quality and profitability, Moody's said. Significant declines in used vehicle auction values, particularly among trucks and large SUVs, is expected to lead to higher credit losses on auto loans and increased depreciation expense on auto leases, pressuring earnings.

The agency said DaimlerChrysler Financial's ratings are supported by its preferential position as the sole provider of incentive-based financing of Chrysler manufactured vehicles and by its organizational and operational achievements after its sale by Daimler to the Cerberus-led investor group.

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