Moody's boosts GM debt rating outlook |
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Tue, 16 Oct 2007 18:55
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NEW YORK (AP) - Moody's Investors Service on Tuesday boosted its outlook for General Motors Corp.'s long-term debt rating to 'positive' from 'negative,' citing gains from the automaker's new union contract.The ratings service also raised GM's speculative grade liquidity rating to 'SGL-1' from 'SGL-3.'Moody's maintained GM's existing long-term non-investment grade 'B3' corporate family, 'Ba3' senior secured and 'Caa1' senior unsecured ratings. None of those ratings are investment grade.The raised outlook takes into account the long-term cost benefits of GM's new contract with the United Auto Workers union, along with the near-term product and revenue challenges GM will continue to face through 2009, Moody's said.In addition, GM's $30 billion in cash and $5.8 billion in long-term credit facilities will provide needed liquidity until 2010, when the substantial cost benefits of the new contract begin to take hold, Moody's said.Moody's said that if GM shows it can make progress in dealing with its product and revenue problems over the next 12 to 18 months, it could be considered for a possible upgrade.The increase in GM's liquidity rating reflects expectations that the automaker will have have ry strong sources' of liquidity to cover all of its cash requirements through 2008, Moody's said.GM shares fell $1.22, or 3 percent, to $39.89 in afternoon trading.Copyright 2007 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.
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