S&P: General Motors unchanged

Standard & Poor's said that General Motors Corp.'s (B/negative/B-3) announcement that it is restating financial results from 2002 through the third quarter of 2006 raises new concerns about the integrity of the company's financial reporting and internal controls, but has no immediate effect on the ratings on GM, GMAC LLC (BB+/Developing/B-1), or GMAC unit Residential Capital LLC (BBB/negative/A-3).

The accounting issues GM is working to resolve encompass several areas, including FAS 133 hedge accounting and accounting for deferred tax liabilities, the agency said.

In addition, GMAC has not yet finalized its financial statements for 2006, after GM sold a majority stake in the finance unit to an investor group in November, S&P noted, adding that GM still expects to file its 10-K by the March 1 deadline.

S&P said it does not believe these errors will affect cash and cash equivalents, which were $26.4 billion at the end of 2006. However, the ratings could be placed on CreditWatch with negative implications if GM were to miss the March 1 filing date with the SEC, even with the brief and normally available extension period.

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