GM, whose debt was downgraded to junk status by Standard & Poor’s earlier this month, has announced that it would like to separate its rating from that of its finance unit, General Motors Acceptance Corp (GMAC).
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Only Moody’s and Dominion Bond Rating Service assign a different credit rating to GMAC than to GM, the company noted in a Securities and Exchange Commission filing. The company stated that the current ratings situation and outlook increases the risk for its long-term funding strategy and heightens the importance of improving its operating results.
Although the company stated that it is exploring actions that might help “mitigate the increased risk,” GM added that there would be no assurance that any such actions “would be successful in achieving a “split” rating from other rating agencies.”
Meanwhile, GM has a $4.55 billion credit line with JPMorgan Chase & Co. and Bank of America Corp. that is due to expire next month, according to Bloomberg, and the automaker may wind up paying more to renew it.
