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DUFF & PHELPS REAFFIRMS GM AND GMAC DEBT RATINGS

 CHICAGO, May 13 /PRNewswire/ -- General Motors Corporation's (NYSE: GM) long-term debt rating of `A-' (Single-A-Minus) was reaffirmed today by Duff & Phelps Credit Rating Co. Subsidiary General Motors Acceptance Corporation's senior long-term debt and commercial paper ratings have also been reaffirmed at `A-' (Single-A-Minus) and Duff 1, respectively. The reaffirmations follow GM's announcement that a yearend 1993 negative adjustment to stockholder's equity may be required under SFAS No. 87. The continued decline in long-term interest rates necessitates a lower discount rate in calculating the unfunded pension liability.
 The size of the potential charge is large and aggravates the significantly underfunded status of GM's pension plans. This potential yearend adjustment could vary up or down based on the then prevailing interest rates but, in either case, represents an accounting entry not a current cash outlay. Only if interest rates remain at the currently low level over the very long-term would there be any cash consequences. Given the pension assumptions already incorporated into our rating, we believe such consequences are not material.
 GM's board of directors has indicated its intent to increase the rate of annual funding in order to reduce the underfunded position. It will be important that, despite the tax-advantaged nature of pension funding, optional funding additions are not made at the expense of investment in the business. In that regard, we believe that gradual economic recovery could produce somewhat better-than-expected operating cash flow allowing for improvement in pension funding without hampering operations.
 -0- 5/13/93
 /CONTACT: Daniel J. Donoghue, CFA, CPA of Duff & Phelps Credit Rating Co., 312-368-3121/
 (GM)


CO: General Motors Corporation ST: Michigan IN: AUT SU: RTG

TM -- NY096 -- 8349 05/13/93 17:32 EDT
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Publication:PR Newswire
Date:May 13, 1993
Words:279
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