Moody's upgrades GMAC

Moody's Investors Service said it upgraded GMAC, Inc.'s issuer rating and senior unsecured rating and the senior unsecured ratings of GMAC-supported subsidiaries to B3 from Ca. GMAC's series A preferred stock was upgraded to Caa3 from C.

This concludes the review for possible upgrade that began on June 10, 2009, and the outlook is stable.

The agency said the upgrade reflects the improvement in the firm's capital position resulting from its December issuance of $2.54 billion of trust preferred securities and $1.25 billion of mandatory convertible preferred securities to the Treasury and Treasury's conversion of $3 billion of its existing preferreds into GMAC common equity. The additional capital allowed GMAC to maintain relatively stable capital ratios even as it recorded a $4.95 billion net loss for the fourth quarter, Moody's noted.

The ratings continued to be constrained by GMAC's liquidity challenges - the company has considerable debt maturities through 2012 and Moody's believes it will need to issue unsecured debt to fund debt maturities at the parent holding company - and by continuing uncertainties at subsidiary Residential Capital LLC in terms of asset quality performance and liquidity, the agency said.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.