Moody's: GM unaffected

Moody's Investors Service said that General Motors Co.'s termination of its U.S. salaried pension plan has certain positive and negative credit elements that largely balance each other out.

Consequently, the undertaking will have no impact on GM's Ba1 rating and positive outlook or on the company's trajectory toward a possible investment grade rating.

"GM's plan has some constructive elements," Moody's senior vice president Bruce Clark said in a news release. "It will reduce the company's pension assets and liabilities by $26 billion and relieve it of the obligation to make future payments to most of its salaried retirees. It will also free it from the volatility associated with pension investment returns, long-term interest rates and mortality rates."

© 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.