S&P boosts Fiat

Standard & Poor's said it raised its long-term corporate credit rating on Fiat SpA to BB from BB-.

At the same time, S&P said it affirmed its B short-term rating on Fiat.

The outlook is stable.

S&P noted that the upgrade reflects Fiat's strong debt reduction achievements, positive trends in the auto sector and improvements in the group's profitability and cash generation.

The agency said that first-half 2006 results confirmed the strong recovery of Fiat Auto and solid performances by CNH Global NV (BB/stable) and Iveco (not rated), adding that the group's financial profile had already dramatically improved in the second half of 2005.

S&P added that Fiat's ratings reflect its still weak position in automotive and the need to complete the restructuring process to restore its market share in Europe and improve its trading margin above the current 1.2%.

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