Fitch lifts GMAC to BB+

Fitch Ratings said it upgraded GMAC LLC's issuer default and senior unsecured debt ratings to BB+ from BB and affirmed the short-term issuer default and debt ratings at B following the closing of the sale of a controlling interest in GMAC to a consortium led by Cerberus FIM Investors, LLC.

The ratings were removed from Rating Watch positive, where they were placed on April 3, and the outlook is positive.

With the closing of the transaction, the ratings of GMAC will no longer be directly linked to those of General Motors Corp. in the sense that a rating action on GM will not automatically translate into a similar action at GMAC. Rather, Fitch said it now views GMAC's relationship with GM as one of a significant customer concentration. As such, Fitch would consider how issues at GM, such as labor disruption or weakening market share, could impact GMAC's business.

The agency said the upgrade recognizes the good record of operating performance the company has demonstrated, despite significant challenges over the past five years; Fitch's expectation that GMAC will continue to maintain good operating performance, with solid earnings while maintaining credit and capital discipline; the company's solid risk-adjusted capital levels; and the good liquidity management the company has demonstrated over a very stressful period. GMAC has been successful obtaining alternative financing sources such as whole loan sales and greater use of securitization to fund its balance sheet as access to capital became more difficult.

The positive outlook reflects Fitch's view that should GMAC be successful in prudently growing non-GM related financing and insurance businesses, improving operational efficiencies and maintaining disciplined underwriting, ratings could be raised from the current levels.

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