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GM Credit Rating Reduced by S&P

July 31 (Bloomberg) -- General Motors Corp., Ford Motor Co. and Chrysler LLC had their credit ratings lowered one step further into junk status by Standard & Poor's over concern that deteriorating U.S. auto sales will reduce cash flow.

The three U.S. automakers now are each rated B-, six steps below investment grade, S&P said today.

``Liquidity for all three automakers is adequate for now, but will be significantly reduced in the second half of this year and during 2009 by continued heavy losses and cash outflows,'' wrote S&P analyst Robert Schulz. ``Liquidity at each automaker will be almost halved by cash losses in 2008 and 2009.''

GM's partly owned finance unit, GMAC LLC, also had its rating lowered a step to B-.

S&P removed GM and Ford from CreditWatch with negative implications, meaning it is less likely the automakers' debt will be downgraded further below investment grade.

http://www.bloomberg.com/apps/news?pid=newsarchive&sid=aXEfsT0p_z0w
 
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