Chrysler Gets Credit For Its New Stock
Chrysler plans to cash in on its high-octane stock, issuing 40 million new shares. The estimated $1.4 billion offering will bolster Chrysler's balance sheet, moving the company a step closer to the investment-grade credit rating that it lost two years ago. At least half of the anticipated proceeds will be used to reduce Chrysler's $3.9 billion unfunded pension liability.
Credit-rating agencies immediately applauded the move, hiking Chrysler's credit rating a notch or two. And investors reacted mildly to the 14% dilution: In the two trading days following the announcement of the offering plans, Chrysler stock fell a point or so, to about 34.