DBRS Morningstar Finalizes Its Provisional Rating of BBB with a Stable Trend on Stellantis’ New Debt Issuance

DBRS Limited (DBRS Morningstar) finalized its provisional rating of BBB with a Stable trend on the EUR 1.25 billion 0.625% fixed-rate senior unsecured notes (the Notes) issued by Stellantis N.V. (Stellantis or the Company) under its Euro Medium Term Note Programme.

The rating assigned is based upon the ratings on already-outstanding series of the above-mentioned debt instrument.

The indicated proceeds of the Notes are for general corporate purposes, which may include repayment or refinancing of other indebtedness. DBRS Morningstar anticipates, however, that the proceeds of the Notes will be substantially applied toward such refinancing, taking into account the Company’s near-term obligations that notably include the recent maturity (March 22, 2021) of a former EUR 1 billion notes issuance of Fiat Chrysler Finance SENC. DBRS Morningstar also notes that substituting the Notes for Stellantis’ other obligations would result in an associated reduction in interest expense. Additionally, as of December 31, 2020, Stellantis’ liquidity was substantial, in the amount of EUR 57.4 billion, consisting of cash/cash equivalents balances of EUR 44.1 billion and availability of EUR 13.3 billion of backup credit lines.

ESG CONSIDERATIONS
A description of how DBRS Morningstar considers ESG factors within the DBRS Morningstar analytical framework can be found in the DBRS Morningstar Criteria: Approach to Environmental, Social, and Governance Risk Factors in Credit Ratings at https://www.dbrsmorningstar.com/research/373262.

Notes:
All figures are in euros unless otherwise noted.

The principal methodology is Rating Companies in the Automotive Manufacturing and Supplier Industries (October 22, 2020, https://www.dbrsmorningstar.com/research/368670), which can be found on dbrsmorningstar.com under Methodologies & Criteria. Other applicable methodologies include the DBRS Morningstar Criteria: Approach to Environmental, Social, and Governance Risk Factors in Credit Ratings (February 3, 2021; https://www.dbrsmorningstar.com/research/373262).

For more information regarding rating methodologies and Coronavirus Disease (COVID-19), please see the following DBRS Morningstar press release: https://www.dbrsmorningstar.com/research/357883.

The rated entity or its related entities did participate in the rating process for this rating action. DBRS Morningstar had access to the accounts and other relevant internal documents of the rated entity or its related entities in connection with this rating action.

This rating is endorsed by DBRS Ratings Limited for use in the United Kingdom, and by DBRS Ratings GmbH for use in the European Union, respectively. The following additional regulatory disclosures apply to endorsed ratings:

This rating concerns a newly issued financial instrument. This is the first DBRS Morningstar rating on this financial instrument.

The last rating action on this transaction took place on January 27, 2021, when DBRS Morningstar upgraded Fiat Chrysler Automobiles N.V. to BBB and noted the name change to Stellantis N.V. as well as discontinued the rating on Peugeot SA.

Generally, the conditions that lead to the assignment of a Negative or Positive trend are generally resolved within a 12-month period. DBRS Morningstar trends and ratings are under regular surveillance.

For further information on DBRS Morningstar historical default rates published by the European Securities and Markets Authority (ESMA) in a central repository, see: http://cerep.esma.europa.eu/cerep-web/statistics/defaults.xhtml. DBRS Morningstar understands further information on DBRS Morningstar historical default rates may be published by the Financial Conduct Authority (FCA) on its webpage: https://www.fca.org.uk/firms/credit-rating-agencies.

Lead Analyst: Robert Streda, Senior Vice President, Autos
Rating Committee Chair: Charles Halam-Andres, Managing Director, Diversified Industries & Sports Finance
Initial Rating Dates: November 8, 2005 (Fiat Chrysler Automobiles N.V./Stellantis N.V.) and August 16, 2006 (Peugeot SA)

For more information on this credit or on this industry, visit www.dbrsmorningstar.com or contact us at info@dbrsmorningstar.com.

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-- Rating Companies in the Automotive Manufacturing and Supplier Industries (October 22, 2020)
https://www.dbrsmorningstar.com/research/368670
-- DBRS Morningstar Criteria: Approach to Environmental, Social, and Governance Risk Factors in Credit Ratings (February 3, 2021)
https://www.dbrsmorningstar.com/research/373262