Moody's downgrades GMAC

Moody's Investors Service said it downgraded the senior unsecured debt of GMAC LLC to C from Caa1, following GMAC's launch of debt exchange offerings for debt of $38 billion.

The outlook is developing.

The downgrade is based on Moody's view that the exchange offering is a distressed exchange, as it results in a diminished financial obligation for GMAC, the agency said.

Ratings also incorporate operating pressures relating to general capital market illiquidity, continuing underperformance at ResCap and the consequent possibility for further reliance upon GMAC for support, weakening asset quality trends in the auto finance portfolio and operating challenges at General Motors Corp.

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