DBRS Places CNH Under Review with Developing Implications

DBRS has today placed the BBB (low) Senior Unsecured Debt ratings of CNH Global N.V. and Case New Holland Inc. (collectively, CNH or the Company) Under Review with Developing Implications. The rating action follows the recent announcement of CNH’s parent company, Fiat S.p.A. (Fiat, rated BBB (low) and concurrently placed Under Review with Negative Implications), had approved a partial and proportional demerger (the Demerger) whereby Fiat intends to transfer to a newly incorporated company, Fiat Industrial S.p.A. (Fiat Industrial), certain assets (mainly shareholdings) in CNH, the truck operations (Iveco S.p.A.) as well as industrial and marine powertrain, businesses; the Demerger would also include the transfer of liabilities, including financial debt. As a result of the Demerger, these businesses will be separated from Fiat’s residual automotive business and related components (New Fiat), which include Fiat Group Automobiles, Ferrari, Maserati, Magneti Marelli, Teksid Group, Comau and FPT Powertrain Technologies.

Strategic objectives of the Demerger include increased autonomy and higher efficiencies in the aim of accelerating the growth of both Fiat Industrial and New Fiat. However, DBRS notes that many details of the Demerger remain to be resolved. These include the eventual allocation of debt between Fiat Industrial and New Fiat as well as the distribution of cash deposits currently held in cash pools at the Fiat level. DBRS observes that CNH’s financial profile could potentially be adversely affected, depending on the eventual resolution of these issues.

DBRS expects the Under Review with Developing Implications status to be resolved within the next few months. A shareholders’ meeting is expected to take place on September 16, 2010. The completion of the Demerger remains subject to shareholder consent as well as other regulatory approvals. In the intervening period, DBRS also anticipates additional information to be provided regarding the eventual capital structures of Fiat Industrial and New Fiat.

Notes:

The applicable methodology is Rating the Industrial Products Industry, which can be found on our website under Methodologies.

This is a Corporate (Industrials) rating.