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Chrysler Corp. & Unit's Ratings Raised; Off S&PWatch

2 November 1998

Chrysler Corp. & Unit's Ratings Raised; Off S&PWatch

    NEW YORK, Oct. 30 -- Standard & Poor's today raised its
ratings on Chrysler Corp. and subsidiary Chrysler Financial Co. L.L.C.
(formerly known  as Chrysler Financial Corp.).  The ratings were removed from
CreditWatch, where they were placed May 6, 1998, following the announcement of
Chrysler's planned merger with Daimler-Benz AG in an all-stock transaction
(see list below).
    At the same time, Standard & Poor's affirmed its 'A-1' commercial paper
rating on Chrysler Financial and its single-'A'-plus/'A-1' corporate credit
ratings on Daimler-Benz.  These ratings were not on CreditWatch.
    The outlook on all three companies is stable.
    The rating upgrades reflect Standard & Poor's expectations that the
merger will be completed within the next month.  With the announcement earlier
this week that a sufficient number of tenders were received from shareholders
of the two companies, all material impediments to the transaction have been
overcome.  The merged company will be called DaimlerChrysler AG.
    The merger will unite two major players in the world automotive industry.
The companies' complementary product offerings and geographic concentrations
afford the opportunity for considerable marketing benefits.  In addition,
potential efficiencies are substantial in such areas as parts procurement,
product design, and joint manufacturing.  However, DaimlerChrysler's
management will face considerable challenges to fully realize potential
benefits, and the rating does not take it for granted that these will come
about in short order.
    Both companies have cash significantly in excess of debt (excluding
finance operations, although these are also conservatively leveraged).  A high
degree of balance sheet strength is expected to be preserved.
    It has not been announced whether the existing debt of Chrysler and
Chrysler Financial -- which will continue as legal entities -- will be
guaranteed by DaimlerChrysler.  In any event, Standard & Poor's views
Chrysler, Chrysler Financial, and DaimlerChrysler as a single economic entity:
the absence of a parental guarantee would not result in a different assessment
of the credit quality of Chrysler and Chrysler Financial's debt.
    OUTLOOK: STABLE
    The intense competitiveness and cyclical characteristics of the auto
industry and the challenges of a smooth transition between Chrysler and
Daimler-Benz constrain ratings upgrade potential over the next few years,
Standard & Poor's said. -- CreditWire

    RATINGS RAISED AND REMOVED FROM CREDITWATCH

                                                     Rating

                                                  To       From
    Chrysler Corp.
    Chrysler Financial Co. L.L.C.
    Corporate credit rating                       A+        A
    Senior unsecured debt                         A+        A
    Bank loan rating                              A+        A

    Auburn Hills Trust
    Senior unsecured debt*                        A+        A

    *Guaranteed by Chrysler Corp.