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March 4, 2008 |
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GMAC (U.K.): Fitch Holds Short-Term Issuer Default Rating at B Fitch Ratings has downgraded and removed from Rating Watch Negative the long-term Issuer Default Rating GMAC LLC and related subsidiaries to 'BB' from 'BB+'. Fitch has also affirmed the 'B' short-term ratings. Fitch originally placed GMAC on Rating Watch Negative on Nov. 14, 2007. The Rating Outlook is Negative. Approximately $100 billion of unsecured debt is affected by this action. The downgrade of GMAC's LT IDR reflects in part the company's financial support for its wholly-owned subsidiary ResCap, which generated considerable losses in 2007. In addition, the downgrade reflects Fitch's view that some of the operating momentum, in the form of increased business diversification from General Motors (GM), that was expected from GMAC's separation from GM has lessened due to the broad challenges the company is facing. The Negative Outlook reflects the more challenging economic and financing environment that GMAC will face throughout 2008. Fitch believes that while the automotive finance and insurance businesses produced acceptable results in 2007, this will likely weaken in 2008 due to increased funding and credit costs, and lower new car sales. Rising funding cost primarily reflect weaker execution from securitization transactions, while rising credit costs reflect Fitch's view that both default frequency and loss severity will increase in the retail automotive finance portfolio. Fitch may downgrade ratings further if automotive credit quality were to weaken beyond historical averages for GMAC or if GMAC were to provide additional and material financial support to ResCap. Fitch has downgraded these ratings and removed them from Rating Watch Negative: GMAC LLC GMAC International Finance B.V. GMAC Bank GmbH GMAC Canada Ltd. General Motors Acceptance Corp. of Canada Ltd. General Motors Acceptance Corp. of Australia -- Long-term IDR to 'BB' from 'BB+'; -- Senior debt to 'BB' from 'BB+'. General Motors Acceptance Corp. (N.Z.) Ltd. -- Long-term IDR to 'BB' from 'BB+'. Fitch has also affirmed these ratings: GMAC LLC GMAC International Finance B.V. GMAC Bank GmbH General Motors Acceptance Corp. of Canada Ltd. General Motors Acceptance Corp. of Australia GMAC Australia (Finance) Ltd. General Motors Acceptance Corp. (U.K.) Plc General Motors Acceptance Corp. (N.Z.) Ltd. -- Short-term IDR 'B'; -- Short-term debt 'B'. GMAC Canada Ltd. -- Short-term IDR 'B'. |
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