S&P rates Chrysler loan BB-, ups some loans to B

Standard & Poor's said it affirmed the B corporate credit rating on Chrysler LLC and DaimlerChrysler Financial Services Americas LLC and removed it from CreditWatch with positive implications, where it was placed Sept. 26, 2007.

The outlook is negative.

The possible upgrade resulted from the announcement that General Motors Corp. reached a contract agreement with the United Auto Workers. As expected, Chrysler reached a largely similar agreement, S&P said.

S&P assigned Chrysler's $7.5 billion secured first-lien term loan a rating BB-, two notches higher than the B corporate credit rating, and raised the rating on the $2 billion second-lien term loan to B from B-.

The negative outlook reflects the agency's view that Chrysler's exposure to weakening industry conditions in North America remains a key risk factor, S&P said.

The rating reflects the wide-ranging challenges the company faces in North America, the agency said.

The rating also reflects a relatively stable market share in North America and a leading share in the North American minivan segment and substantial automaker liquidity and well-performing automotive finance affiliate, Moody's said.

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