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Chrysler Corp. $500 Million 100-Year Debentures Rated 'A' by Fitch - Fitch Financial Wire -

8 August 1997

Chrysler Corp. $500 Million 100-Year Debentures Rated 'A' by Fitch - Fitch Financial Wire -

    NEW YORK, Aug. 8 -- Chrysler Corp.'s $500 million of 7.40%
debentures, due Aug. 1, 2097, are rated 'A' by Fitch.  In addition, Chrysler's
outstanding debt issues, including $550 million of Auburn Hills trust notes is
affirmed at 'A'.  Chrysler will use the proceeds for general corporate
purposes, including payment on Aug. 7, 1997 of a portion of the $526 million
aggregate redemption price of its outstanding 10.40% notes, due 1999, and
10.95% debentures, due 2017.
    Chrysler has substantially improved its competitiveness through a
combination of successful products and a lower cost structure, enhancing its
ability to weather heightened U.S. competition and cyclical downturns.
Profitability, based on a rich product mix and controls on structural and
variable costs, is among the highest in the global auto industry, somewhat
mitigating concerns arising from its high dependence on the U.S. market. To
support forward growth, Chrysler continues to step out and establish presences
in high-potential markets and market segments overseas, but Fitch estimates it
will take some time before these investments contribute meaningfully to cash
flow.
    Chrysler's financial flexibility remains robust, with low debt leverage
and removal of pension funding concerns.  The company has adhered to its
spending disciplines, and fortified its downturn planning by lowering costs
and maintaining cash close to its target $7.5 billion.  Creditor protection is
above-average at the top of the cycle, with EBITDA interest cover of over 16
times (x) for the twelve months ended June 30, 1997, and debt/EBITDA a low
0.42x at that date.  Although these measures will weaken during a cyclical
downturn, Fitch anticipates Chrysler will be able to fund its product plans
without borrowing through the next recession.  Chrysler has also demonstrated
flexibility in managing share repurchases.

SOURCE  Fitch Investors Service