It seems that S&P thinks that GM is in danger of bankruptcy.
"At this juncture, it's our conclusion that this isn't a far-fetched possibility if the kind of deterioration in results we've seen over the last few quarters should continue," Sprinzen said.
It seems that they may also spin off the GMAC financing arm.
The developing status reflects the possibility that GM may sell a controlling stake in GMAC to a highly rated financial institution, in which case its investment-grade rating could be restored, S&P said.
If GM does not sell a majority stake in GMAC, GMAC's ratings would be lowered to the level of GM's, Sprinzen said. S&P has long rated GM and GMAC the same because of the control GM has over GMAC and because their businesses are intertwined.
That should be a nice item for a big bank to run. It would seem to take in quite a bit of money and is one of the better run parts of GM. I'm hoping Citigroup gets it. They seem to be good at running consumer banking type products.
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