A Fiat Chrysler Automobiles sign stands outside the automaker's U.S. headquarters Auburn Hills, Mich., on May 25, 2018.Rebecca Cook/Reuters
Credit rating agency S&P on Friday said it had raised Fiat Chrysler’s long-term debt rating to ‘BBB-’ following shareholder approval of the merger with rival Peugeot owner PSA earlier this week.
“We consider that the combined group will benefit from increased scale, improved business and geographic diversity, and a strong capital structure,” S&P said, estimating a net cash position of more than 10 billion euros ($12.2 billion) at closing and solid free cash flow generation prospects.
The agency had placed FCA’s rating on CreditWatch with positive implications in November 2019.
The outlook on the rating is stable, S&P said adding this reflected on one side expectations of improving profitability and cash flow generation in 2021-2022, while also taking into account the prospect of “an extraordinarily challenging but well-managed 2020” and execution risks over the merger.
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