Fitch puts GMAC, ResCap on evolving watch

Fitch Ratings said it placed the ratings of General Motors Acceptance Corp. and Residential Capital Corp. (ResCap) on Rating Watch evolving. The ratings of GM are not affected by this action.

Fitch said the placement of GMAC and ResCap on Rating Watch evolving follows General Motors Corp.'s announcement that it is considering a range of options, including selling a controlling stake in GMAC, and potential actions to preserve the investment-grade ratings of ResCap. GM is pursuing such options in order to provide GMAC with financial flexibility, namely in the form of improved access to cost effective financing.

From a ratings perspective, a majority sale of GMAC would allow Fitch to separate the ratings of GMAC from GM. Importantly, any sale of more than 20% of GMAC would remove the company from the GM 'control' group, and therefore GMAC would not be subject to liens by the Pension Benefit Guaranty Corp.

In addition to selling a controlling interest in GMAC, Fitch said it expects further changes in the relationship between GM and GMAC, such as a more formalized operating agreement and limitations on inter-company payables. An important consideration in any sale transaction is preserving the mutually beneficial relationship between GM and GMAC.

Ratings placed on Rating Watch evolving include the BB senior debt of GMAC, GMAC International Finance BV, GMAC Bank GmbH, General Motors Acceptance Corp., Australia, General Motors Acceptance Corp. of Canada Ltd. and General Motors Acceptance Corp. (N.Z.) Ltd.

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