Fiat, the Italian carmaker, received an unwanted Christmas gift from Moody's Investors Service when the rating agency downgraded its credit ratings to junk despite recent progress in cutting its €32.8bn ($33.7bn) debt burden.

Fiat became the latest member of the "fallen angels" club of companies to lose its investment grade status in 2002 after Moody's lowered Fiat's senior unsecured debt rating to Ba1 from Baa3 and its short-term rating to Not-Prime from Prime-3 on Tuesday.