Chrysler’s Credit Rating Cut by Fitch

Chrysler LLC's credit rating was cut further below investment grade by Fitch Ratings, which cited “restricted access'' to competitive financing for its auto sales.

The issuer default rating on Chrysler, the third-largest U.S. automaker, was lowered to CCC, eight levels into junk status, from B-, Fitch said in a statement today. The New York- based ratings company kept its outlook at “negative.''

Chrysler Financial, the automaker's finance arm, is renewing its borrowings, and “the higher costs associated with any renewal will make it more challenging to provide competitive and economic financing of retail sales,'' Fitch said in the statement. With other lenders unlikely to take up all the slack, Chrysler may have to reduce production, the ratings company said.

Chrysler's U.S. sales already fell 22 percent in the first half, the most of any major automaker and double the industry's 10 percent slide. The Auburn Hills, Michigan-based automaker said on July 25 that Chrysler Financial would stop offering leases on Aug. 1. Bloomberg.com