RPT-UPDATE 1-S&P cuts ratings on Chrysler debt

(Repeats story transmitted earlier on Friday)
* S&P cuts ratings on debt due in 2013, 2014
* Says Chrysler would likely dissolve in event of
bankruptcy

NEW YORK, April 10 (Reuters) - Standard & Poor's Rating
Services on Friday lowered its debt ratings on Chrysler
loans due in 2013 and 2014, citing a lower potential
recovery by debtors in the event of payment defaults by the
carmaker.
Standard & Poor's said it lowered by two notches its
issue-level ratings on Chrysler's senior secured first-lien
term loan due 2013 to 'CC' from 'CCC'. S&P said its downgrade
indicates lenders can expect an average 30 to 50 percent
recovery in the event of a payment default.
The ratings agency said its corporate credit rating was
left unchanged, at 'CC', reflecting no change in its view of
the likelihood of default by Chrysler from either a bankruptcy
or a distressed debt exchange.
Standard & Poor's lowered its issue rating on the
carmaker's senior secured second-lien term loan due 2014 by
one notch to 'C' from 'CC', suggesting lenders can expect a
negligible to a 10 percent recovery if a default occurs.
"The lowering of our issue ratings reflects lower recovery
estimates, given our current view that Chrysler would be
unlikely to emerge from bankruptcy as one reorganized entity,"
Standard & Poor's recovery analyst Greg Maddock said in a
release.
"If Chrysler goes into bankruptcy, I would expect it to go
into liquidation -- that its assets would be sold in whole or
in part," Maddock said in an interview.
"Instead of being reorganized, there would be no carmaker
after bankruptcy," he said.
(Reporting by Ransdell Pierson; Editing by John Picinich)
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ransdell.pierson.reuters.com@reuters.net; 646-223-6034;
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Keywords: CHRYSLER/

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