Moody’s assigns a Baa3 to Stellantis

Moody’s Investors Service said it assigned a Baa3 issuer rating to Fiat Chrysler Automobiles NV, which will be renamed Stellantis NV. Concurrently, Moody’s upgraded the senior unsecured ratings of FCA and its subsidiary Fiat Chrysler Finance Europe SA to Baa3 from Ba2. The outlook on both entities changed to stable from developing.

Moody’s also changed the outlooks for Peugeot SA and its subsidiaries to stable from negative. Concurrently, Moody’s affirmed all PSA ratings and its subsidiaries, including the issuer rating and backed senior unsecured ratings of PSA, where Stellantis will become the obligor of GIE PSA Tresorerie at Baa3. Following the merger to form Stellantis, Moody’s will withdraw Peugeot’s issuer rating and medium-term note program rating.

“The assigned Baa3 issuer rating on FCA reflects the expected closing of the merger between FCA and PSA to create Stellantis, a larger and more diversified entity with significant synergy potential,” said Matthias Heck, a Moody’s vice president, senior credit officer and lead analyst for FCA, PSA and Stellantis, in a press release.

“In our scenario of gradually recovering global light vehicle sales, Stellantis should be able to swiftly improve margins and de-lever to levels, required for the Baa3, while maintaining strong liquidity and being able to spend sizeable investments into carbon transition and autonomous driving technologies,” Heck added.

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