Moody's Downgrades Chrysler Even Deeper Into Junk

moody s downgrades chrysler even deeper into junk

As Moody’s has downgraded GM and GMAC to Caa2, it only makes sense that the ratings agency has assigned potential “partner” Chrysler and Chrysler Financial the exact same rating. MarketWatch reports that the ChryCo Bros. are now at Caa2. Folks, Caa2 is the third circle of junk credit Hell, only a blink away from the last part of this category (Caa3). In other words, “Obligations rated Caa are judged to be of poor standing and are subject to very high credit risk, and have extremely poor credit quality.” There are only two ratings lower: Ca and then C. And then… game over. Bottom line: Chrysler’s “plenty o’ cash contention” was the complete B.S. anyone with industry insight knew it to be. Or, as Moody’s puts it, “The downgrade of the Chrysler rating reflects the increased pressure on the company’s liquidity position due to the precipitous decline in US automotive demand and the likelihood that shipment levels will remain depressed through 2009.” Bottom line II: the only institution that will lend GM. GMAC, Chrysler and Chrysler Financial is you (a.k.a. the U.S. government). That said, Chrysler’s owners Cerberus have plenty deep pockets. According to their website: “Cerberus holds controlling or significant minority interests in companies around the world. In aggregate, these companies currently generate over $100 billion in annual revenues [emphasis added].” But Feinberg’s Boyz know better than to throw good money after bad.

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  • Zarba Zarba on Oct 28, 2008

    Moody's Downgraded Ford to B1 Yesterday. That's three grades above Chrysler, and four grades below "Investment Grade". "Rating "B" - Bonds which are rated B generally lack characteristics of the desirable investment. Assurance of interest and principal payments and of maintenance of other terms of the contract over any long period of time may be small." That definition pretty much sums it up.

  • Threeer Threeer on Oct 28, 2008

    Hmmm...so their financial rating roughly equates to their product rating? Brilliant!

  • Kip65688146 "Everyone is worried about the public stations, but why don't we focus on the low hanging fruit: home charging? "BAM!!!!!!!!!!!!!!!!!!.............This guy gets it!I'll add current battery tech means EV's in their current state are not replacements for ICE Cars & trucks but make a good argument as 2rd or 3rd vehicles in mulit-car households which is hardly a niche market.
  • 2ACL Looking forward to the next part. I didn't like the first generation, but the second-generation was on my radar; I like the low-key, yet elegant styling, and the automotive media raved that the road-handling was significantly cleaned up from its nautical predecessor's. I'd still consider one if a replacement event unexpectedly befell my TL, but developments since have made that something of a long shot.
  • Deanst “Switching to EVs will be end of the Dodge brand. Nobody wants EVs.”Tesla, a brand which only sells EVs, is the number 1 luxury vehicle seller in America. But do go on…….
  • Randall Tefft Sundeen Oldsmobile was ALWAYS my favorite GM marque ! I remember as a kid you couldn't walk down the street without tripping on one! In 1977 and 1984 respectively olds sold. Million units, GM's second biggest seller as well as being the test brand for new options (Why take a risk with Cadillac?) The first CLUTCHLESS MANUAL , the first ELECTRIC POWER WINDOWS the first AUTOMATIC not to mention in 1974 the first airbag. Iam fortunate enough to live in a warm climate where old cars are plentiful sadly very few Oldsmobiles. Many features we take for granted were developed by this special brand
  • Conundrum Some parts of the US are in a bad way due to drought and climate change as well, but Posky manages to avoid mentioning Lake Meade, Musk going bananas over no water for his Nevada gigafactory, a few wildfires and floods here and there. No let's have a chuckle over China's experience instead, and chuck in the name Toyota in the headline as a draw. Musk is demanding China ensures his Shanghai factory gets plent 'o power, because that's what spoilt billionaires do. Me, me, me first. Doesn't work when everyone's gasping for breath.Kind of seems to me that avoiding the obvious is the American way. Let's burn some more coal and make things much better! Yeah!Meanwhile, apparently whoever runs this website on a technical basis needs to go back to training school.meanwhileThe way this site "operates", which it mainly doesn't, is a complete farce!Let's have an opinionated article on that.
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