Mercedes 2009 Annual Report Download - page 98

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Further information on other financial commitments and contin-
gent liabilities from guarantees granted as well as on the elec-
tronic toll-collection system and related risks is provided in Note
28 (Guarantees and other financial commitments) and Note 27
(Legal proceedings) of the Notes to the Consolidated Financial
Statements, respectively.
Credit ratings
Uncertainty during 2009 with regard to the ongoing develop-
ment of international automotive markets was reflected also in
the development of our credit ratings with the rating agencies
Standard & Poor’s (S&P), Moody’s Investors Service (Moody’s),
Fitch Ratings (Fitch) and DBRS.
During the first half of 2009, both Fitch and S&P downgraded
their credit ratings for Daimler by one step to BBB+, with reference
to worsening earnings and financial prospects in view of the
further weakening of global automobile markets as the year pro-
gressed. Moody’s and DBRS maintained their Daimler ratings
at A level, however. Moody’s recognized the countermeasures ini-
tiated by the Group, while DBRS emphasized Daimler’s strong
business profile.
On February 27, 2009, S&P changed its outlook for Daimler’s
credit rating from stable to negative. This adjustment was made
in light of the rapidly weakening demand for cars and commer-
cial vehicles in the world’s major markets. On June 18, 2009, S&P
downgraded our long-term rating from A- to BBB+ with a nega-
tive outlook, justifying this move with its changed financial expec-
tations caused by the weak condition and poor prospects of
global car and commercial-vehicle markets and by the poor finan-
cial results so far posted by Daimler during the crisis.
Moody’s affirmed its A3 long-term rating for Daimler on February
18, 2009, but changed the outlook from stable to negative. The
negative outlook was a reaction to the demand slump in our core
sales markets, which was worse than Moody’s had anticipated in
terms of both extent and rapidity, and to Moody’s expectation of
negative effects on Daimler’s profitability and cash generation.
On January 29, 2009, Fitch downgraded our long-term credit
rating from A- to BBB+ with stable outlook, reacting to the impact
of the worsening economic situation on Daimler’s profitability
and cash generation. On March 25, 2009, Fitch confirmed our
rating in the context of a general review of the ratings of Euro-
pean automobile manufacturers, and adjusted the outlook for
Daimler to negative, as with the other carmakers. Fitch justi-
fied this change with the worsened business expectations for the
entire European automotive industry during the next two years.
DBRS confirmed its long-term rating for Daimler at A (low) on
November 10, 2009. According to DBRS, this assessment reflects
the strength of our business profile based on a leading position
in the fields of premium automobiles and trucks. The outlook
remained unchanged at stable.
The short-term ratings of all four rating agencies remained
unchanged during 2009.
A-2
P-2
F2
R-1 (low)
A-
A3
A-
A (low)
A-2
P-2
F2
R-1 (low)
BBB+
A3
BBB+
A (low)
End of 2008
Long-term credit ratings
Standard & Poor’s
Moody’s
Fitch
DBRS
Short-term credit ratings
Standard & Poor’s
Moody’s
Fitch
DBRS
End of 2009