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Fiat Chrysler Repays Term Loan, Followed by Moody’s Rating

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Mar. 16 2016, Published 12:22 p.m. ET

Price movement of Fiat Chrysler

Fiat Chrysler Automobiles (FCAU) has a market cap of $9.7 billion. FCAU fell by 2.2% to close at $7.60 per share as of March 15, 2016. The price movement on a weekly, monthly, and year-to-date (or YTD) basis is 4.0%, 24.4%, and -45.7%, respectively.

Currently, FCAU is trading 8.7% above its 20-day moving average, 4.3% above its 50-day moving average, and 40.8% below its 200-day moving average.

The Vanguard FTSE All-World Ex-US ETF (VEU) invests 0.08% of its holdings in FCAU. The ETF is designed to track a market-cap-weighted index of large- and midcap global non-US stocks. The YTD price movement of VEU was -1.3% as of March 14, 2016.

The market cap of FCAU’s competitors are as follows:

  • Toyota Motor (TM) — $176.7 billion
  • Ford Motor (F) — $52.5 billion
  • Honda Motor Company (HMC) — $49.1 billion
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Fiat Chrysler changes to term loan

Fiat US LLC, a subsidiary of Fiat Chrysler Automobiles N.V., has entered into amendments to its term loan maturing in 2017 and its term loan maturing in 2018. These amendments would eliminate covenants restricting the provision of guarantees and payment of dividends by FCA US for the benefit of the rest of the FCA Group.

For the effectiveness of the amendments, FCA US made a $2 billion voluntary prepayment, applied to the term loans in proportion to respective principal balances. The aggregate outstanding principal balance of the term loans is ~$2.8 billion after the prepayment.

According to Moody’s Investor Services, FCA will continue to use a portion of its consolidated cash to pay down debt. The FCA’s outstanding senior unsecured bonds remain at B2, or one notch below the B1 CFR and FCA US’s term loan Bs at Ba1, according to Moody’s. It also assigned positive outlook to FCA with the expectation of improvement in financial profile and margins in 2016.

Sales of Fiat Chrysler Automobiles in February 2016

Let’s look now at sales for FCA US:

  • FCA US reported total sales of 183,000 units, a rise of 11.8% from February 2015.
  • Jeep brand reported sales of 68,000 units, a rise of 22.6% from February 2015.
  • Chrysler brand reported sales of 21,000 units, a fall of 26.1% from February 2015.
  • Dodge brand reported sales of 47,000 units, a rise of 12.2% from February 2015.
  • Ram brand reported sales of 43,000 units, a rise of 27.4% from February 2015.
  • Alfa brand reported sales of 49 units, a rise of 4.3% from February 2015.
  • Fiat brand reported sales of 2,993 units, a fall of 9.0% from February 2015.

Next, we’ll look at sales for FCA Canada:

  • FCA Canada reported total sales of 19,000 units, a rise of 0.55% from February 2015.
  • Ram pickup reported sales of 6,784 units, a rise of 20.2% from February 2015.
  • Jeep Cherokee reported sales of 2,322 units, a rise of 57.7% from February 2015.
  • Jeep brand reported sales of 5,724 units, a rise of 33.7% from February 2015.
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