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Moody's may cut GMAC
Moody's Investors Service said it placed the long-term ratings of GMAC LLC (B3 senior unsecured) on review for possible downgrade.
The agency said that this follows the ratings downgrade of General Motors Corp., the company's 49% owner.
The review of the ratings reflects the potential that GM's weaker credit position may negatively affect GMAC's volumes, asset quality and profitability, the agency said.
The review is also based on Moody's concern regarding GMAC's financial flexibility should weak credit market conditions continue.
Moody's said that declines in industry auto sales, shifts in consumer sentiment away from SUVs and trucks, and extended economic weakness are likely to cause GMAC's consumer and dealer defaults to rise and recoveries from repossessed vehicle sales to decline.
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