GM » Topics » Status of Debt Ratings

This excerpt taken from the GM 10-Q filed May 8, 2009.

Status of Debt Ratings

Our fixed income securities are rated by four independent credit rating agencies: Dominion Bond Rating Services (DBRS), Moody’s Investor Service (Moody’s), Fitch Ratings (Fitch), and Standard & Poor’s (S&P). The ratings indicate the agencies’ assessment of a company’s ability to pay interest, distributions, dividends, and principal on these securities. Lower credit ratings generally represent higher borrowing costs and reduced access to capital markets for a company. Their ratings of us are based on information provided by us as well as other sources. The agencies consider a number of factors when determining a rating including, but not limited to, cash flows, liquidity, profitability, business position and risk profile, ability to service debt, and the amount of debt as a component of total capitalization.

DBRS, Moody’s, Fitch, and S&P currently rate our credit at non-investment grade. The following table summarizes our credit ratings at May 1, 2009:

 

Rating Agency

   Corporate    Secured   Senior
Unsecured
   Outlook

DBRS

   CC    CCC (low)   CC    Review-Negative

Fitch

   C    CCC   C    Negative

Moody’s

   Ca    Caa2   C    Negative

S&P

   CC    CCC-   C    Negative

Rating actions taken by each of the credit rating agencies from January 1, 2009 through May 1, 2009 were as follows:

DBRS: April 27, 2009 — Placed our ratings Under Review with Negative Implications.

Fitch: No actions taken.

Moody’s: April 21, 2009 — Downgraded our Secured rating to Caa2 from B3.

S&P: April 10, 2009 — Downgraded our Secured rating to CCC- from CCC and revised the recovery rating to 2 from 1.

This excerpt taken from the GM 10-K filed Feb 28, 2008.
Status of Debt Ratings
 
Our fixed income securities are rated by four independent credit rating agencies: Dominion Bond Rating Services (DBRS), Moody’s Investor Service (Moody’s), Fitch Ratings (Fitch), and Standard & Poor’s (S&P). The ratings indicate the agencies’ assessment of a company’s ability to pay interest, distributions, dividends and principal on these securities. Lower credit ratings are generally representative of higher borrowing costs and reduced access to capital markets to a company. Their ratings on us are based on information provided by us and other sources. Factors the agencies consider when determining a rating include, but are not limited to, cash flows, liquidity, profitability, business position and risk profile, ability to service debt and the amount of debt as a component of total capitalization.


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DBRS, Moody’s, Fitch and S&P currently rate our credit at non-investment grade. The following table summarizes our credit ratings as of February 18, 2008:
 
                     
Rating Agency
  Corporate   Secured   Senior Unsecured   Outlook
 
DBRS
  B (high)   Not Rated     B     Stable
Fitch
  B   BB     B-     Negative
Moody’s
  B3   Ba3     Caa1     Stable
S&P
  B   BB-     B-     Stable
 
Rating actions taken by each of the credit rating agencies during 2007 are as follows:
 
DBRS:  On May 14, 2007, DBRS affirmed our senior unsecured debt rating at ‘B’ with ‘Negative’ trend. On October 11, 2007, DBRS affirmed our senior unsecured debt rating at ‘B’ but placed the credit rating on ‘Stable’ trend from ‘Negative’ trend. On November 2, 2007, DBRS assigned us an issuer rating at ‘B (high)’ with ‘Stable’ trend.
 
Fitch:  On May 23, 2007, Fitch affirmed our issuer default rating at ‘B’ with ‘Rating Watch Negative’ but downgraded our senior unsecured debt rating to ‘B-’ from ‘B’. On July 12, 2007 Fitch affirmed our issuer default rating at ‘B’ but removed it from ‘Rating Watch Negative’. On September 24, 2007, Fitch affirmed our issuer-default rating at ‘B’ but placed the credit rating on ‘Rating Watch Negative’. On September 26, 2007, Fitch affirmed our issuer-default rating at ‘B’ but placed the credit rating on ‘Negative’ outlook from ‘Rating Watch Negative’.
 
Moody’s:  On October 16, 2007, Moody’s affirmed our long-term debt rating, including the ‘B3’ corporate family rating, ‘Ba3’ senior secured rating, and ‘Caa1’ senior unsecured rating and placed the credit rating on ‘Positive’ outlook from ‘Negative’ outlook. On November 7, 2007, Moody’s affirmed our long-term debt rating, including the ‘B3’ corporate family rating, ‘Ba3’ senior secured rating, and ‘Caa1’ senior unsecured rating and placed the credit rating on ‘Stable’ outlook from ‘Positive’ outlook.
 
S&P:  On June 7, 2007, S&P recalibrated its rating scale resulting in an upgrade to our secured credit rating to ‘BB-’ from ‘B+’. On September 16, 2007 S&P affirmed our corporate debt rating at ‘B’ and placed the credit rating on ‘Credit Watch Positive’ from ‘Negative’ outlook. On October 19, 2007, S&P affirmed our corporate debt rating at ‘B’ but placed the credit rating on ‘Stable’ outlook from ‘Credit Watch Positive’.
 
While our non-investment grade rating has increased borrowing costs and limited access to unsecured debt markets, we have mitigated these outcomes by actions taken over the past few years to focus on increased use of liquidity sources other than institutional unsecured markets, which are not directly affected by ratings on unsecured debt, including secured funding sources and conduit facilities. Further reductions of our credit ratings could increase the possibility of additional terms and conditions contained in any new or replacement financing arrangements. As a result of specific funding actions taken over the past few years, management believes that we will continue to have access to sufficient capital to meet our ongoing funding needs over the short and medium-term. Notwithstanding the foregoing, management believes that the current ratings situation and outlook increase the level of risk for achieving our funding strategy. In addition, the ratings situation and outlook increase the importance of successfully executing our plans for improvement of operating results.
 
This excerpt taken from the GM 10-Q filed Nov 8, 2007.
Status of Debt Ratings
 
Dominion Bond Rating Services (DBRS), Fitch Ratings (Fitch), Moody’s Investor Service (Moody’s), and Standard & Poors (S&P) currently rate our credit at non-investment grade. The following table summarizes our credit ratings as of November 2, 2007:
 
                 
Rating Agency
  Corporate   Secured   Senior Unsecured   Outlook
 
DBRS
  B (high)   Not Rated   B   Stable
Fitch
  B   BB   B−   Negative
Moody’s
  B3   Ba3   Caa1   Positive
S&P
  B   BB−   B−   Stable
 
On October 11, 2007, DBRS affirmed our senior unsecured debt rating at ‘B’ but placed the credit rating on ‘Stable’ trend from ‘Negative’ trend. On November 2, 2007, DBRS assigned us an issuer rating at ‘B (high)’ with


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‘stable’ trend. On September 24, 2007, Fitch affirmed our issuer-default rating at ‘B’ but placed the credit rating on ‘Rating Watch Negative’. On September 26, 2007, Fitch affirmed our issuer-default rating at ‘B’ but placed the credit rating on ‘Negative’ outlook from ‘Rating Watch Negative’. On October 16, 2007, Moody’s affirmed our long-term debt rating, including the ‘B3’ corporate family rating, ‘Ba3’ senior secured rating, and ‘Caa1’ senior unsecured rating and placed the credit rating on ‘Positive’ outlook from ‘Negative’ outlook. On September 16, 2007 S&P affirmed our Corporate debt rating at ‘B’ and placed the credit rating on ‘Credit Watch Positive’ from ‘Negative’ outlook. On October 19, 2007, S&P affirmed our Corporate debt rating at ‘B’ but placed the credit rating on ‘Stable’ outlook from ‘Credit Watch Positive’.
 
While the non-investment grade ratings identified above have translated into higher borrowing costs and limited access to unsecured debt markets, these outcomes have been mitigated by actions taken by us over the past few years to focus on increased use of liquidity sources other than institutional unsecured markets, which are not directly affected by ratings on unsecured debt, including secured funding sources and conduit facilities. Further reductions of our credit ratings could increase the possibility of additional terms and conditions contained in any new or replacement financing arrangements. As a result of specific funding actions taken over the past few years, management believes that we will continue to have access to sufficient capital to meet our ongoing funding needs over the short and medium term. Notwithstanding the foregoing, management believes that the current ratings situation and outlook increase the level of risk for achieving our funding strategy as well as the importance of successfully executing our plans for improvement of operating results.
 
This excerpt taken from the GM 10-Q filed Aug 7, 2007.
Status of Debt Ratings
 
Dominion Bond Rating Services (DBRS), Fitch Ratings (Fitch), Moody’s Investor Service (Moody’s), and Standard & Poors (S&P) currently rate GM’s credit at non-investment grade. The following table summarizes GM’s credit ratings as of August 1, 2007:
 
             
Rating Agency
  Senior Unsecured Debt   Outlook   Commercial Paper
 
DBRS
  B   Negative   R-5
Fitch
  B−   Negative   Withdrawn
Moody’s
  Caa1   Negative   Not Prime
S&P
  B−   Negative   B-3
 
On May 14, 2007, DBRS affirmed GM’s senior unsecured debt rating at ‘B’ with ‘Negative’ trend. On May 23, 2007, Fitch affirmed GM’s issuer default rating at ‘B’ with ’Rating Watch Negative’ but downgraded GM’s senior unsecured debt rating to ‘B−’ from ‘B’. On July 12, 2007 Fitch affirmed GM’s issuer default rating at ‘B’ but removed it from ‘Rating Watch Negative’. On June 7, 2007, S&P recalibrated its rating scale resulting in an upgrade to GM’s secured credit rating to ‘BB−’ from ‘B+’. As of August 1, 2007, GM’s secured credit is rated at ‘BB’ by Fitch, ‘Ba3’ by Moody’s and ‘BB−’ by S&P. For the period January 1, 2007 through August 1, 2007, DBRS and Moody’s have taken no ratings action on GM’s unsecured or secured debt.
 
While the non-investment grade ratings identified above have translated into higher borrowing costs and limited access to unsecured debt markets, these outcomes have been mitigated by actions taken by GM over the past few years to focus on increased use of liquidity sources other than institutional unsecured markets, which are not directly affected by ratings on unsecured debt, including secured funding sources and conduit facilities. Further reductions of GM’s credit ratings could increase the possibility of additional terms and conditions contained in any


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Liquidity and Capital Resources — (continued)
 

This excerpt taken from the GM 10-Q filed May 8, 2007.
Status of Debt Ratings
 
Dominion Bond Rating Services (DBRS), Fitch Ratings (Fitch), Moody’s Investor Service (Moody’s), and Standard & Poors (S&P) currently rate GM’s credit at non-investment grade. The following table summarizes GM’s credit ratings as of May 1, 2007:
 
             
Rating Agency
  Senior Unsecured Debt   Outlook   Commercial Paper
 
DBRS
  B   Negative   R-5
Fitch
  B   Rating Watch Negative   Withdrawn
Moody’s
  Caa1   Negative   Not Prime
S&P
  B−   Negative   B-3
 
For the period January 1, 2007 through May 1, 2007, DBRS, Fitch, Moody’s and S&P have taken no ratings action on GM’s unsecured or secured debt. As of May 1, 2007, GM’s secured credit is rated at ‘BB’ by Fitch, ‘Ba3’ by Moody’s and ‘B+’ by S&P.
 
While the non-investment grade ratings identified above have translated into higher borrowing costs and limited access to unsecured debt markets, these outcomes have been mitigated by actions taken by GM over the past few years to focus on increased use of liquidity sources other than institutional unsecured markets, which are not directly affected by ratings on unsecured debt, including secured funding sources and conduit facilities. Further reductions of GM’s credit ratings could increase the possibility of additional terms and conditions contained in any new or replacement financing arrangements. As a result of specific funding actions taken over the past few years, management believes that GM will continue to have access to sufficient capital to meet its ongoing funding needs over the short and medium term. Notwithstanding the foregoing, management believes that the current ratings situation and outlook increase the level of risk for achieving GM’s funding strategy. In addition, the ratings situation and outlook increase the importance of successfully executing GM’s plans for improvement of operating results.
 
This excerpt taken from the GM 10-K filed Mar 15, 2007.
Status of Debt Ratings
 
Dominion Bond Rating Services (DBRS), Moody’s Investor Service ( Moody’s), Fitch, and S&P currently rate GM’s credit at non-investment grade. The following table summarizes GM’s credit ratings as of March 12, 2007:
 
             
Rating Agency
  Senior Unsecured Debt  
Outlook
  Commercial Paper
 
DBRS
  B   Negative   R-5
Fitch
  B   Rating Watch Negative   Withdrawn
Moody’s
  Caa1   Negative   Not Prime
S&P
  B-   Negative   B-3
 
During 2006, each of DBRS, Fitch, Moody’s and S&P downgraded GM’s unsecured debt.
 
On July 24, 2006 DBRS downgraded GM’s senior unsecured rating to B from B (high) and commercial paper rating to R-3 (low) from R-3 (middle) following the completion of the aforementioned secured credit transaction. The trend remained negative. On September 15, 2006, DBRS revised its short-term credit rating on GM to R-5 Negative from R-3 (low) Negative as a result of its new ratings methodology. On November 30, 2006 DBRS affirmed GM’s senior unsecured rating at B (negative trend) and commercial paper rating at R-5 (negative trend).
 
On March 1, 2006, Fitch downgraded GM’s senior unsecured rating from B+ to B. On June 20, 2006, Fitch assigned a BB rating with negative rating watch to GM’s secured credit facility. GM’s issuer rating remained unchanged at B, on Rating Watch Negative. On November 13, 2006, Fitch assigned a BB rating with negative rating watch to GM’s secured term loan.


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This excerpt taken from the GM 10-Q filed Nov 7, 2006.
Status of Debt Ratings
 
Standard & Poor’s, Moody’s, and Fitch currently rate GM’s and GMAC’s credit at non-investment grade. Dominion Bond Rating Services (DBRS) rates GM’s credit at non-investment grade and maintains an investment


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Status of Debt Ratings — (continued)
 
grade rating for GMAC. All major rating agencies rate ResCap at investment grade. The following table summarizes GM’s, GMAC’s and ResCap’s credit ratings as of September 30, 2006:
 
                         
    Senior Unsecured Debt   Commercial Paper
Rating Agency
  GM   GMAC   ResCap   GM   GMAC   ResCap
 
                                                    
DBRS
  B   BBB(Low)   BBB   R-5   R-3   R-2(Mid)
Fitch
  B   BB   BBB−   Withdrawn   B   F3
Moody’s
  Caa1   Ba1   Baa3   Not Prime   Not Prime   P3
S&P
  B−   BB   BBB−   B-3   B-1   A-3
 
             
    Outlook
Rating Agency
  GM   GMAC   ResCap
 
DBRS
  Negative
Rating Watch
  Developing   Developing
Fitch
  Negative   Positive   Positive
Moody’s
  Negative
Credit Watch
  Review for
Possible
Downgrade
  Review for
Possible
Downgrade
S&P
  Negative   Developing   Developing
 
While GM experienced limited access to the capital markets in the third quarter of 2006 as a result of deterioration in its credit ratings, GM was able to utilize available liquidity to meet its capital requirements. Similarly, due to the downgrade of GMAC’s unsecured debt to non-investment grade, GMAC’s access to the unsecured capital markets was limited. GMAC was able to meet its capital requirements by accessing alternative funding sources, with a focus on secured funding and automotive whole loan sales.
 
Since December 31, 2005, each of Moody’s, Fitch, Standard & Poor’s and DBRS downgraded GM’s unsecured debt.
 
On February 21, 2006, Moody’s downgraded GM’s senior unsecured debt to B2 with a negative outlook from B1 under review for a possible downgrade. On March 16, 2006, Moody’s placed the senior unsecured ratings of GM, GMAC and ResCap under review for a possible downgrade. At the same time, Moody’s changed the review status of ResCap’s short-term P-3 ratings to review for possible downgrade from direction uncertain. On March 29, 2006 Moody’s downgraded GM’s senior unsecured debt to B3 with a negative outlook leaving the ratings of GMAC and ResCap on review for possible downgrade. On May 5, 2006, Moody’s placed GM’s senior unsecured debt rating under review for a possible downgrade. GM’s corporate rating and the ratings of GMAC and ResCap were unaffected. On June 20, 2006, Moody’s assigned a B2 rating to GM’s secured credit facility, affirmed the company’s B3 corporate rating and lowered its unsecured credit rating to Caa1. The rating outlook is negative. Credit ratings of GMAC and ResCap were unaffected. On September 22, 2006, Moody’s revised the debt rating of the secured credit facility as a result of new Loss-Given-Default methodology to Ba3 from B2. Issuer credit rating and long-term unsecured debt rating of GM, GMAC and ResCap were unaffected.
 
On March 1, 2006, Fitch downgraded GM’s senior unsecured rating from B+ to B. Following GM’s April 2, 2006 entry into a definitive agreement to sell 51% of its stake in GMAC, Fitch changed GMAC’s and ResCap’s rating-watch outlook from evolving to positive. On June 20, 2006, Fitch assigned a BB rating to GM’s secured credit facility. GM’s issuer rating remained unchanged at B, on Rating Watch Negative. Credit ratings of GMAC and ResCap were unaffected.
 
On March 29, 2006, Standard and Poor’s placed both GM’s long term B and short term B-3 corporate credit ratings on CreditWatch with negative implications. The ratings for GMAC and ResCap were affirmed as BB and BBB minus, respectively. Both GMAC and ResCap’s ratings were left on CreditWatch with developing


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