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Rating Action:

Moody's downgrades ratings of Chrysler Financial auto floorplan deals; deals remain under review for further possible downgrade

24 Apr 2009

New York, April 24, 2009 -- Moody's Investors Service has taken the following ratings actions on dealer floorplan asset-backed notes issued by Chrysler Financial Services Americas LLC ("Chrysler Financial"):

Master Chrysler Financial Owner Trust 2006-A (formerly known as DaimlerChrysler Master Owner Trust 2006-A)

Class A Notes, Downgraded from Baa3 to B2 and remain under review for further possible downgrade; previously on January 14, 2009, downgraded from A3 to Baa3 under review for further possible downgrade

Master Chrysler Financial Owner Trust 2008-B (formerly known as DaimlerChrysler Master Owner Trust 2008-B)

Class A Notes, Downgraded from A1 to Baa3 and remain under review for further possible downgrade; previously on January 14, 2009, downgraded from Aaa to A1 under review for further possible downgrade

Both transactions are issued out of a single master trust whose assets consist of a revolving pool of receivables payable by dealers and secured primarily by the dealers' related inventory, which consists primarily of cars and light trucks manufactured by Chrysler LLC ("Chrysler"). The dealers' accounts were originated and are serviced by Chrysler Financial. The 2006-A Class A Notes will begin their accumulation phase in June.

RATIONALE

On April 21, Moody's downgraded the Corporate Family Ratings for Chrysler to C. The downgrade of the corporate rating was driven by the impact that the unprecedented erosion in the North American auto markets is having on Chrysler's ongoing viability, and on the value of its tangible assets and its various brands. The actions on the Chrysler floorplan securitizations also reflect the significant negative effect that a possible bankruptcy could have on key performance factors in the floorplan transactions. A potential Chrysler bankruptcy (reorganization or liquidation) could lead to high dealer default rates, depressed collateral recovery values, and could severely constrain the servicer's ability to monitor dealers and secure collateral if numerous dealers default in a short period of time. Since our last rating actions on the floorplan transactions on January 14, 2009, the probability of a Chrysler bankruptcy has increased. The rating actions reflect the current bankruptcy probability and the significant event risk facing Chrysler's outstanding floorplan transactions caused by the near term uncertainty surrounding Chrysler's future.

The notes remain on review for further possible downgrade due to significant uncertainty surrounding Chrysler in 2009. On March 31, the Obama administration rejected the restructuring plans submitted by Chrysler. The administration also affirmed its willingness to rely on the bankruptcy process to restructure the company unless it can formulate a new plan that the administration determines will be effective in restoring its competitiveness. Chrysler faces a significant burden in demonstrating its viability due to a narrow window for submitting a revised plan (by April 30, 2009) and therefore has a high risk of filing for bankruptcy, in Moody's view. The ratings are now consistent with Moody's expectation that a Chapter 11 filing is quite likely but that an immediate Chapter 7 filing is not likely. Moody's will continue to monitor developments and will further assess the potential impact on their rated outstanding floorplan transactions as necessary. The uncertainty related to potential developments, particularly the potential for a Chapter 7 filing by Chrysler later this year, underlies the continued review process for the transactions.

RATING METHODOLOGY

Moody's floorplan analysis is based on a joint-default probability analysis of both the manufacturer and dealers with loss given default determined by collateral at risk net of recoveries. The total collateral at risk with a joint-default is the remaining unpaid floorplan loan calculated based on the monthly payment rate prior to dealer default.

The analysis is implemented through a simulation model, which simulates losses during a two year amortization period following an event of default based on a set of key modeled assumptions as follows:

• Manufacturer bankruptcy scenarios

• Dealer default rates

• Recovery rates

• Payment rates

In addition, Moody's includes other modeled assumptions in the simulation model such as linkage of default probability between manufacturer and dealer to macroeconomic activity, linkage between manufacturer and dealer default probability, and sold-out-of-trust assumptions.

Modeled assumptions form the basis of the quantitative analysis executed through a simulation model. Manufacturer default is simulated, which is further specified into Chapter 11 and Chapter 7 bankruptcies. Manufacturer default probability is modeled based on committee assessment, often with reference to the manufacturer rating. Next, the simulation model simulates dealer default, which takes place randomly throughout the two year amortization period. The final step in simulation is to calculate total principal collections. For non-defaulting dealers, outstanding floorplan balances are assumed to be paid in full at the end of the two year amortization period and losses will be zero. For defaulted dealers, the model calculates total collateral at risk determined by payment rate prior to dealer default and then applies a recovery rate under different circumstances where the manufacturer is either in a non-bankrupt status, a Chapter 11 bankruptcy or a Chapter 7 bankruptcy.

Each simulation run simulates a total loss and corresponding internal rate of return ("IRR") reduction for each bond. This IRR helps form the quantitative basis of our rating assessment. Moody's also evaluates qualitative factors such as the quality of provided information, servicer strength, and dealership profile. Combining the qualitative and quantitative analysis, a final rating level is determined.

Other methodologies and factors that may have been considered in the process of rating this issue can also be found at www.moodys.com in the Credit Policy & Methodologies directory, in the Ratings Methodologies subdirectory."

SERVICER

Chrysler Financial is a wholly-owned indirect subsidiary of Chrysler Holding LLC ("Chrysler Holding'') and engages in providing consumer and dealer automotive financing for the products of Chrysler LLC and other manufacturers, including retail and lease financing for vehicles, dealer inventory and other financing needs. Chrysler Holding owns both Chrysler Financial and Chrysler. Long-term senior unsecured debt ratings for Chrysler Financial and Chrysler are Ca and C, respectively. The rating outlook for Chrysler Financial is negative.

For more information, please see www.moodys.com.

New York
Mark DiRienz
Managing Director
Structured Finance Group
Moody's Investors Service
JOURNALISTS: 212-553-0376
SUBSCRIBERS: 212-553-1653

New York
Wei Hu
Vice President - Senior Analyst
Structured Finance Group
Moody's Investors Service
JOURNALISTS: 212-553-0376
SUBSCRIBERS: 212-553-1653

Moody's downgrades ratings of Chrysler Financial auto floorplan deals; deals remain under review for further possible downgrade
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