Fitch downgrades GM credit rating to junk status.
International credit-rating agency Fitch Ratings cut the credit rating for General Motors Corp. on Tuesday to junk bond or non-investment-grade status, in what heralds financial difficulties for the world's largest carmaker.
Fitch lowered the long-term senior unsecured debt ratings on GM and its finance arm General Motors Acceptance Corp. by one level to BB-plus from BBB-minus.
''The action reflects the continuing decline in GM's North American sales of key mid-size and large SUV products, increasing product and price competition in the large pickup market, and the corresponding impact of these two segments on consolidated profitability,'' Fitch said.
Its ratings outlook for GM remains negative.
The downgrade, which prompted prices for GM stocks and bonds to plunge, followed similar ratings action earlier this month by Standard & Poor's.
S&P cut its debt ratings for GM and Ford Motor Co. on May 5 to junk bond status, citing their gloomy business prospects. The U.S. ratings agency also said GM's consolidated debt outstanding totaled
$291.8 billion at the end of March.
With those ratings, GM will likely have to pay more to borrow and see its financial situation further deteriorate.
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|Publication:||Japan Weekly Monitor|
|Date:||May 31, 2005|
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