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April 29, 2008 |
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BANCO GMAC: Moody's Affirms B1 Global Currency Deposit Ratings Moody's Investors Service has affirmed the ratings assigned to Banco GMAC S.A: -- the bank financial strength rating of E+; -- the B1 for both global local-currency and foreign-currency deposits; and -- the Baa1.br/BR-2 for national scale deposits in Brazil. The outlook remains negative for all ratings, except for the BFSR, which outlook is stable. The affirmation of Banco GMAC's ratings follows the rating actions taken on parent GMAC LLC, on April 23, 2008. The latest rating downgrades at the parental level, started in November 2007, have not hurt the local bank's financial condition, which continues to present a satisfactory financial performance on the back of a favorable economic environment and strong auto-finance growth. The E+ BFSR mainly reflects the bank's adequate financials and its niche market operations, as well as Moody's continued concern regarding the financial weakness of its ultimate parent GMAC LLC. As a captive finance company, however, the BFSR is also affected by its operational dependence on the success of GMAC's overall strategy. Moreover, the bank in Brazil is subject to standard Brazilian banking regulations and supervision. Given Banco GMAC's own business strategy and its operational integration with GMAC LLC, Moody's notes that the fragile financial condition of the parent could potentially influence the cost of the bank's predominantly wholesale funding. Higher funding costs, in turn, could potentially hurt profitability and therefore its competitive position within its market niche. Moody's negative outlook on Banco GMAC's ratings primarily relates to the possibility that GMAC LLC's difficulties could worsen, which might lead to deterioration in the Brazilian subsidiary's liquidity profile, and thus its capacity to sustain local deposits level, something that has not been affected so far. These ratings for Banco GMAC S.A. were affirmed: -- Bank financial strength rating: E+, stable outlook; -- Global long- and short-term local-currency deposit ratings: B1/NP, negative outlook; -- Long- and short-term foreign-currency deposit ratings: B1/NP, negative outlook; -- Brazilian long- and short-term national scale deposit ratings: Baa1.br/BR-2, negative outlook. Banco GMAC is headquartered in Sao Paulo, Brazil. As of Dec. 31 2007, Banco GMAC reported total assets of BRL5.82 billion and equity of BRL857.4 million. |
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