The ability to access the capital markets or other forms of financing and the related costs are dependent, amongst other things, on the Group’s credit ratings. Following downgrades by the major rating agencies in the first quarter of 2009 and during 2011, Fiat is currently rated below investment grade, with ratings on its long-term debt of Ba2 (Ba3 for senior unsecured bonds) with negative outlook from Moody’s Investors Service Inc., BB with credit watch negative from Standard & Poor’s Ratings Services (a subsidiary of The McGraw- Hill Companies, Inc.), and BB with negative outlook from Fitch Ratings Ltd. The rating agencies review their ratings at least annually and, as such, the assignment of new ratings to Fiat during 2012 cannot be excluded. It is not currently possible to predict the timing or outcome of any rating review. Any further downgrades would increase Fiat’s cost of capital and potentially limit its access to sources of financing with a consequent material adverse effect on Fiat’s business prospects, financial condition and/or results of operations.
Chrysler has been assigned a corporate credit rating of B2 (with a positive outlook) by Moody’s Investor Service and B+ (with a stable outlook) by Standard & Poor’s. Because Chrysler is more highly leveraged and has a lower corporate credit rating than Fiat, it is possible that consolidation of Chrysler’s financial information into Fiat’s financial information could result in a rating review of Fiat and potentially a lower credit rating.