Fitch: GMAC, ResCap still on evolving watch

Fitch Ratings said that the ratings for General Motors Acceptance Corp. (GMAC) and its wholly owned subsidiary Residential Capital Corp. (ResCap) remain on rating Watch Evolving by Fitch Ratings following the announcement that GMAC will delay filing their SEC form 10-Ks and will be required to either restate or reclassify certain items in prior financial statements to address a recently surfaced accounting issue.

The issue is material for ResCap, however, it still undetermined whether this will be material for GMAC. The companies have not indicated the size of the potential accounting issue at this time, the agency noted.

While Fitch is concerned that the companies did not properly apply appropriate GAAP related to the associated cash flows from loan originations, Fitch said it does not believe that what amounts to a reclassification of these cash flows is analytically significant and thus, by itself, will not have any effect on the current ratings.

Affected ratings include GMAC's long-term issuer default rating at BB and ResCap's long-term issuer default rating of BBB-.

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