Fitch cuts Ally Financial

Fitch Ratings said it downgraded the long-term issuer default rating and senior unsecured debt rating of Ally Financial Inc. and its subsidiaries to BB- from BB.

The agency also said it downgraded its viability rating to BB- from BB.

The outlook is negative.

The agency also said it affirmed its short-term issuer default rating at B, short-term debt rating at B and long-term FDIC-guaranteed debt rating at AAA.

The company's subsidiaries that were downgraded include GMAC International Finance BV, GMAC Bank GmbH, Ally Credit Canada Ltd., GMAC Financial Services NZ Ltd., GMAC Australia LLC and GMAC (U.K.) plc.

The downgrades reflect the deteriorating operating trends in Ally's wholly-owned mortgage subsidiary, Residential Capital LLC, which has continued to be a drag on Ally's consolidated credit profile, Fitch said.

The downgrades also consider the company's exposure to contingent mortgage-related rep and warranty and litigation issues tied to Residential Capital, which could potentially impact Ally's capital and liquidity levels, the agency said.

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