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S&P: GM on watch
Standard & Poor's said it placed its BB long-term and B-1 short-term ratings on General Motors Corp. (GM), General Motors Acceptance Corp. (GMAC) and all GMAC-related entities, including Residential Capital Corp. (ResCap; BBB-/A-3), on CreditWatch with negative implications.
The agency said this action does not reflect deterioration in ResCap's operating performance or financial condition, but stems strictly from the review initiated on the ratings on GMAC and GM.
S&P noted the CreditWatch placement reflects its increased concerns about GM's ability to effect a turnaround at its troubled North American automotive operations amid sharply deteriorating product mix and sales volume, and prospects for persisting severe pricing pressure.
The review also stems from concerns about GM's exposure to the problems of its ailing supplier and former affiliate, Delphi Corp. (CCC+/developing/C), S&P added.
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