Moody's lifts AmeriCredit to Ba2

Moody's Investors Service said it upgraded the corporate family rating of AmeriCredit Corp. to Ba2 from Ba3.

The outlook is stable.

The agency said the upgrade reflects AmeriCredit's sustained improvement in financial performance, adherence to a disciplined growth strategy and continued strength in profitability, asset quality and liquidity. AmeriCredit's ratings also reflects a strategic move toward "full spectrum lending," as the company has layered in significant specialty prime and near-prime franchises via acquisitions.

Balancing these positive factors are AmeriCredit's still substantially subprime focus, which exacerbates its vulnerability to adverse economic developments; a relatively unbalanced funding structure weighted heavily toward securitized funding; a significant move toward extended-term (72 month) financing and higher loan-to-value ratios in its core subprime business; the challenges inherent in integrating acquisitions; and an element of caution regarding the macroeconomic consumer credit environment, which in Moody's view has peaked and turned to the downside.

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