Fitch ups Residential Capital

Fitch Ratings said it upgraded Residential Capital LLC's long-term issuer default rating to B from D, short-term issuer default rating to B from D and senior unsecured rating to CCC with a recovery rating of RR6 from C.

Fitch also said it affirmed the company's short-term debt at C.

The outlook is stable.

The upgrades are in conjunction with a rating action on its parent, Ally Financial Inc., Fitch said.

The ratings primarily reflect the implicit support and linkage with Ally, demonstrated by close business integration, inter-company credit lines and capital contributions made by Ally to date, the agency said.

The ratings also consider actions taken by the company to reduce its legacy mortgage exposure, improvement in earnings and capital levels compared to prior levels, Fitch said.

But the ratings are constrained by the continued weak fundamental profile of the company and the lack of ongoing formal commitments or assurances from Ally for future funding or capital support, the agency added.

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