Chrysler Group LLC reported a first-quarter 2011 net profit. In 2010 the company's EBITDA margin was 9.5% (including our adjustments) with positive free operating cash flow (FOCF). We believe that as a gradual market recovery continues in North America, Chrysler's automotive operations will generate at least upper-single-digit EBITDA margins and some positive operating cash flow in 2011. We expect the company to be 46% owned by Fiat SpA (BB/Negative/B) at the close of the proposed transactions and this ownership percentage could increase further to 51% by year-end. We view Chrysler as strategically important to Fiat, but even Fiat's 46% ownership would not represent a large cash investment by Fiat. We are assigning our preliminary 'B+' corporate credit rating and stable
