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Jeep and Ram could be spun off from FCA, says Marchionne

Jeep is surely the biggest single feather left in the cap of the Fiat Chrysler Automobiles portfolio. Under Sergio Marchionne's leadership, Jeep went from fewer than 500,000 annual sales in 2008 to 1.4 million in 2016, and is on track for 2 million by 2018. Add in the brand's legacy, status as one of the most recognizable nameplates in the world, and rabid fan base, and Jeep has extraordinary monetary value to its parent company. Investors and analysts have certainly noticed Jeep's inherent value. According to The Detroit Free Press, Morgan Stanley's Adam Jonas asked FCA chief Sergio Marchionne if he would ever consider spinning Jeep and Ram, FCA's dedicated truck brand, into a separate corporate entity, and he responded with a simple "Yes." Jonas estimated Jeep's worth in January of this year at $22 billion. Ram was valued at $11.2 billion. Marchionne has a history of spinning off brands while keeping them part of FCA's corporate umbrella. The most noteworthy example of this value maximization was with Ferrari, which now trades on the New York Stock Exchange and rakes in $3.4 billion in annual revenue and close to $435 million in net income, reports the Free Press. Marchionne still serves as chairman and CEO of Ferrari, and Fiat heir John Elkann owns 22 percent of the Italian marque's shares. Even if the offloading of Jeep and Ram into a separate entity would amount to little more than a profit-driven ownership change on paper, it would be huge news to the brands' loyal fanbases. In any case, such a move would likely take years to actually happen and probably wouldn't mean much at all to the products that Jeep and Ram produce. In other words, Jeep fans can keep the pitchforks in the shed ... for now. Related Video: This content is hosted by a third party. To view it, please update your privacy preferences. Manage Settings.

Ferrari borrows $2.6 billion to finance FCA spinoff

Ferrari announced Monday that it is borrowing about $2.6 billion to finance its spinoff from Fiat Chrysler Automobiles. Here's how it breaks down: Ferrari NV, the automaker's parent company based in the Netherlands, is taking out loans totaling 2.5 billion euros. That's equivalent to $2.64 billion at current exchange rates, and is divided between a term loan of $2.12 billion and a revolving credit facility of $529 million. The larger term loan "will be used to refinance indebtedness owing to Fiat Chrysler Automobiles," among other purposes. That ought to constitute the lion's share of the $2.38 billion which the Prancing Horse marque was, according to reports last year, slated to pay its current parent company in order to help FCA fund its ambitious growth plans. The separate line of credit is earmarked "to be used from time to time for general corporate and working capital purposes of the Ferrari group." Though Ferrari is not expected to take any other Fiat Chrysler properties with it, the "group" in this case would include its various financial services and distribution arms around the world that may have been separately incorporated. As noted in the statement below, the financial arrangement "represents a further step towards the separation of Ferrari from the FCA Group," following the separate stock issues from both companies as independent from each other. FERRARI N.V. SIGNS ˆ2.5 BILLION SYNDICATED CREDIT FACILITY Ferrari N.V. (NYSE: RACE) ("Ferrari") announced today that it has entered into a ˆ2.5 billion syndicated loan facility with a group of ten bookrunner banks. The facility comprises a bridge loan (the "Bridge Loan") and a term loan (the "Term Loan") of ˆ2 billion in aggregate and a revolving credit facility of ˆ500 million (the "RCF"). Proceeds of the Bridge Loan and Term Loan will be used to refinance indebtedness owing to Fiat Chrysler AutomobilesN.V. (NYSE: FCAU) ("FCA") and other indebtedness and for other general corporate purposes. Proceeds of the RCF may be used from time to time for general corporate and working capital purposes of the Ferrari group. The Bridge Loan has a 12 month maturity with an option for Ferrari to extend once for a six-month period. Ferrari intends to refinance the Bridge Loan prior to its maturity with longer term debt, including through capital markets or other financing transactions. The Term Loan, which comprises a majority of the total facility, and the RCF each have a maturity of five years.

Sebastian Vettel risks losing F1 championship lead in Sunday's Italian Grand Prix

MONZA, Italy — Sebastian Vettel has been on the podium at Ferrari's home Italian Grand Prix for the past two years, but anything less than a win on Sunday could cost the German the lead in the Formula One championship points race. The Ferrari driver is only seven points clear of Lewis Hamilton, the difference between first and second place, with his Mercedes rival fresh from last weekend's pole-to-flag success in Belgium and 5-4 up on race wins. Hamilton won at Monza in 2014 and 2015 and was runner-up last year to now-retired teammate and eventual champion Nico Rosberg. The Briton has also been on pole at the "Pista Magica" for the past three years. But Ferrari has closed the gap, and Vettel can count on a wave of local support at the historic Milanese track where he took his first grand prix victory with Toro Rosso in 2008. "I think Monza is never a critical race for Ferrari. I think it's the nicest race," the four-times world champion told reporters ahead of a weekend that will also see his team celebrate their 70th anniversary. "We have a lot of support, so I'm really looking forward to it already." Vettel, with a new three-year contract signed only last weekend, won at Monza with Red Bull in 2011 and 2013 but has yet to do so in Ferrari red. If he does, he will become the first driver to win the race with three different teams since Britain's Stirling Moss in the 1950s. In 2015, Vettel's first season since switching to Ferrari, he finished second. Last year he was third. "We've been second, we've been third, so maybe we can get the last step on the podium that is missing," said the 30-year-old, adding that there was no reason for Ferrari to fear any circuit from now on. Hamilton will also have plenty of fans, with the locals respecting a true racer, and can make history with a record pole position after equaling Michael Schumacher's all-time tally of 68 in Belgium. The Mercedes driver knows he needs to make the most of the moment in the last European race of the season, with Ferrari likely to have the upper hand again once the action switches to Singapore. "Clearly we have not a bad car on the straights. I imagine it's going to be very, very close in the next race," he said after Spa. Red Bull, with Australian Daniel Ricciardo in his ancestral homeland and smiling following his third place in Belgium, will again be the best of the rest although Max Verstappen is likely to have grid penalties following his retirement in Spa.