LONDON, June 26 (Reuters) - Credit ratings agency Moody's Investors Service has lowered the long-term senior unsecured debt rating of Italian automaker Fiat to Baa3 from Baa2, leaving the firm's credit worthiness one notch abouve "junk".
At the same time Moody's lowered its ratings on Fiat's commercial paper to to Prime-3 from Prime-2. The outlook for all ratings is negative.
"The downgrade ... reflects Moody's expectation that the operating performance of Fiat's automotive business will remain under considerable pressure through 2003," Moody's said in a statement.
"Moreover, Fiat's 86 percent-owned farm and construction equipment unit, CNH NV, continues to face a severe cyclical downturn, and the company's truck operation, Iveco, will have to contend with softer demand in the European market into 2003."
In a related action, Moody's confirmed the Ba2 rating of Case Corporation and Case Credit Corporation, also assigning a negative outlook.