Fiat SpA Chief Executive Officer Sergio Marchionne said the Italian carmaker won’t risk a credit- rating downgrade to gain full ownership of Chrysler Group LLC.

“We can’t jeopardize the rating of Fiat,” Marchionne told reporters late yesterday in Gavi, Italy, at a presentation of the Freemont sport-utility vehicle. “The easiest route” is an initial public offering at Chrysler instead of an outright purchase of the stake Fiat doesn’t currently own, reported Bloomberg.

Fiat was placed under review for a possible downgrade by Moody’s Investor Services and Fitch Ratings in April after the carmaker announced plans to raise its Chrysler stake. Standard & Poor’s lowered its long-term corporate credit rating on the carmaker to BB in February and confirmed its “negative outlook.” All Fiat’s ratings are below investment grade.

The automaker, based in Turin, Italy, last month consolidated Chrysler’s results, a sign of the rapid integration of the two since the Auburn Hills, Michigan-based manufacturer exited bankruptcy in June 2009. S&P said in April its “negative outlook” reflected the “very substantial” operating and financial risks related to increased Chrysler exposure.

A share sale at Chrysler, as opposed to a purchase of the remaining shares, would mean less direct risk exposure for Fiat. Marchionne said yesterday he’s not in talks to acquire the United Auto Workers retiree health-care trust fund’s stake in the U.S. automaker. An IPO of Chrysler isn’t on tap for this year, he added.

“The market is not there” for a share sale, he said in an interview.

Fiat fell as much as 5 cents, or 0.7 percent, to 7.28 euros and was down 0.3 percent to 7.31 euros as of 10:11 a.m. in Milan trading. The shares have gained 9.1 percent this year, valuing the carmaker at 8.94 billion euros ($12.9 billion).

Fiat, which was initially granted a 20 percent stake in Chrysler by the U.S. government, aims to hold 57 percent of the third-biggest U.S. automaker by the end of 2011. The UAW trust will have 41.5 percent of Chrysler at that time, Fiat said.

Fiat agreed June 3 to pay $500 million for the U.S. government’s remaining 6 percent stake in Chrysler, boosting its holding to 52 percent. The CEO expects to receive an additional 5 percent stake in the fourth quarter in return for developing a fuel-efficient car for Chrysler.

Fiat has also made an offer to buy Canada’s 1.5 percent holding in Chrysler for $125 million and has acquired the U.S. government’s rights to buy the shares held by the UAW’s retiree trust, also known as VEBA.

“Marchionne may wait to see how Fiat and Chrysler cash generation develops and then decide whether to buy the VEBA stake or go for an IPO,” said Massimo Vecchio, a Mediobanca Spa analyst in Milan who has an “outperform” rating on Fiat. “Strong cash flow at Fiat and Chrysler are crucial to finance the call options exercise and to enhance company value.”

Marchionne also said that a listing of Ferrari SpA, Fiat’s most profitable unit, isn’t currently on the table, while it’s “always a possibility.”

Fiat has enough liquidity and has “no urgency” to issue new bonds, Marchionne said. The Italian carmaker this week confirmed its financial targets for 2011, including net income of about 300 million euros and its plan to sell 6 million cars with Chrysler by 2014.

Marchionne is pushing Chrysler this year to raise its global sales by 32 percent to 2 million vehicles and turn an annual profit of $200 million to $500 million. Chrysler last month posted a first-quarter net income of $116 million, its first since emerging from bankruptcy in 2009. Global sales during that period increased by 18 percent.

Marchionne said that Fiat isn’t interested in buying General Motors Co.’s Adam Opel unit. German magazines Der Spiegel and Auto Bild reported on June 9 that GM is prepared to sell Opel as losses at the European division persist. Fiat was a suitor for Opel when it was for sale in 2009.