S&P keeps GMAC on developing watch

Standard & Poor's said GMAC LLC's (formerly General Motors Acceptance Corp.) BB corporate credit rating remains on CreditWatch developing, where it was placed on Oct. 3, 2005, pending completion of General Motors Corp.'s planned sale of 51% of its ownership interest in GMAC to a consortium led by Cerberus Capital Management. Upon completion of the sale, the agency said it will likely raise the rating to BB+.

The agency said several key closing conditions have recently been satisfied, such as Cerberus being granted U.S. anti-trust approval for the transaction, but the Federal Deposit Insurance Corp. announced on July 28 a six-month moratorium on approving ownership changes affecting industrial loan companies. The Cerberus consortium had submitted notices with respect to GMAC's industrial loan company, GMAC Automotive Bank, and the timing of the approval is likely to be affected by the moratorium. GMAC and GM are now working with the consortium to consider ways of avoiding delay of the targeted closing date of later in 2006, the agency said.

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