S&P lowers General Motors

Standard & Poor's said it lowered the corporate credit rating on General Motors Corp. to CC from CCC+ and its senior secured and senior unsecured debt.

The outlook is negative.

The downgrade follows GM's announcement, as part of its request for immediate federal assistance, that it will seek to reduce its current debt burden by more than half as it attempts to reduce cash outflows and win support for the new U.S. government-backed loans, according to the agency.

"We believe the most likely scenario is that GM will offer to exchange some or all of its outstanding debt for equity or new debt at a steep discount to face value," S&P analyst Robert Schulz said in a statement.

"Given GM's weakening liquidity position, we consider such an offer to be a distressed exchange and, as such, is tantamount to a default," he continued.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.