Fitch: Mercedes-Benz (Thailand) outlook negative

Fitch Ratings said it changed the outlook on Mercedes-Benz (Thailand) Ltd.'s 2.5 billion in Thai baht guaranteed debentures due 2009 to negative from stable. The agency also said it affirmed its national long-term rating on the debentures at AA(tha). The rating is based entirely on the full, irrevocable and unconditional guarantee provided by Daimler AG.

The outlook change follows a similar revision in outlook on Daimler, the guarantor and parent. The negative view on Daimler reflects revised forecasts for European car manufacturers and expectations for industry growth over the next two years, Fitch said.

The agency said it is increasingly concerned about the extent of manufacturers' falling profitability and the potential for accelerated cash consumption in the next two years, as well as the potential for heightened volatility in financial metrics.

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