S&P; Downgrades Debt Rating on Chrysler Corp.

DETROIT —  Standard & Poor’s Corp. lowered debt ratings for Chrysler Corp. on Wednesday, a reflection of what industry analysts call the No. 3 auto maker’s deteriorating financial state.

S&P; lowered the auto maker to a BB-minus from a BB-plus. It also downgraded Chrysler Financial Corp. and its unit, Chrysler Canada Ltd., and Auburn Hills Trust, a debt guaranteed by Chrysler, citing a $21.3-billion debt and depressed auto sales.

But Chrysler officials call the ratings drop by the debt-rating guardian unwarranted and say they believe that their worst problems are over.

“It’s no secret that the recession has been a drain on Chrysler as it has been on virtually all U.S. businesses,” Chrysler spokesman Tom Houston said. “However, we remain confident that we have the financial resources necessary to continue to support our aggressive new-product programs.”

He said the timing of the downgrading was surprising. Chrysler’s daily retail selling rate increased 13% from April to May, and mini-vans continue to dominate the market, Houston said.