GMAC Also Dropped To Junk Status
The S&P clarified it's position on GMAC and GM. "Standard & Poor's Ratings Services said today that it lowered its long- and short-term corporate credit ratings on General Motors Corp., General Motors Acceptance Corp., and all related entities."
"GMAC will likely be more reliant on ABS funding, its future borrowing capacity in the unsecured term debt market is unclear. If GMAC remains heavily dependent on ABS funding, this would be detrimental to the asset protection for unsecured debt holders. Although we have decided not to notch down GMAC's senior unsecured issue ratings from its corporate credit rating at this juncture, we could still do so in the future."
"In the absence of sufficient steps to restructure the relationship between them, GMAC's rating will remain equalized with GM's." GMAC is one of the largest mortgage firms in the US.