GM Bonds: Closer To Junk Status?

[Perian]

Source: Financial Times
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GM bonds: Can investors steer clear of trouble?

By Jenny Wiggins in New York
Published: March 9 2005 20:15 | Last updated: March 9 2005 20:15

Owning General Motors' bonds in recent years must have seemed to some like being a passenger in a car speeding down a mountain road. From a position close to the peak of creditworthiness, the largest US carmaker has seen its credit rating career towards the precipice that separates the best-rated, investment grade companies from their junk-rated counterparts.

Now, the edge of the cliff appears to some to be drawing closer. Over the past few weeks, bonds issued by GM and General Motors Acceptance Corp - its finance subsidiary, which issues the vast bulk of the car company's overall debt - have fallen sharply in value. Investors have become increasingly convinced that Standard & Poor's, one of the three leading credit ratings agencies, is moving closer to lowering GM's ratings to junk.

[Globalist]

Rating agencies act like ill-programmed space shuttle computers. They work fine in normal times, but in difficult times, they start shutting down engines when you need their thrust so badly to regain the right trajectory.

[gulfsolar]

Now The Bonds Will Match The Product Line Junk!!!!!!!!!!!!!!!!!!!!!!!

[ethayes]

Great!!! Now they can use thier worthless paper to do what they should have been doing from the beginning, design something on them. If a singer ain't singing if actor ain't acting if a writer ain't writing their messing up. If GM ain't designing welll......