GM Debt Reduced To Junk
GM's debt was reduced to "junk" this morning. "Standard & Poor's cut General Motors Corp.'s debt ratings to junk status on Thursday in a move that will reduce the automaker's avenues for raising funds as it struggles with global competition and rising healthcare costs."
"The rating outlook is negative. S&P said the move reflects its conclusion that management's strategies may be ineffective in addressing GM's competitive disadvantages."
The market rallied yesterday on the basis of this move, which doesn't look so smart now. "The bid by Kirk Kerkorian's Tracinda Corp. to increase its ownership stake in GM represents an additional uncertainty, S&P said, but said this was not a factor at all in the current rating action."