S&P boosts GMAC

Standard & Poor's said it raised its ratings on GMAC LLC to BB+/B-1 from BB/B-1 and removed them from CreditWatch, where they had been placed on Oct. 3.

The outlook is now developing.

At the same time, S&P said it raised its ratings on GMAC's subsidiary, Residential Capital LLC, to BBB/A-3 from BBB-A-3 and removed them from CreditWatch, where they were placed on Oct. 3.

The outlook is negative.

According to S&P, the upgrades reflect the benefits to GMAC and ResCap that will result from ultimate parent General Motors Corp.'s (GM, B/Watch negative/B-3) sale of a 51% ownership stake in GMAC to a consortium headed by Cerberus Capital Management LP, in a transaction it expects to close shortly.

The agency added that it believes the transaction will result in a lower risk of default at GMAC than at GM, making it appropriate to sever the absolute correlation in the ratings between the two.

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