Detroit, Michigan – Standard & Poor’s Ratings Services has upgraded the credit ratings of both General Motors and GM Financial to investment grade with a stable outlook, lowering both the short-term and long-term borrowing costs for the global automaker and its finance subsidiary.
The new GM corporate and GM Financial credit rating is BBB-. That is one level higher than the previous GM rating of BB+, which S&P assigned in September 2011. In September 2013, S&P revised GM’s outlook from “stable” to “positive.” GM Financial’s previous rating was BB.
“Delivering segment-leading vehicles, improving the efficiency of our operations and building a fortress balance sheet made this upgrade possible,” GM CEO Mary Barra said. “While we are not yet satisfied, and know we have work to do, I am confident that our renewed focus on our customers will drive even stronger business results.”
In the years leading up to the Great Recession, ratings agencies assigned junk status to several automakers. Ford’s credit fell to junk status in 2005, and the company had to offer huge amounts of collateral in 2006 to fund its restructuring, including its blue oval logo. In 2012, it regained investment-grade status.
At its annual Global Business Conference for investors on October 1, GM will share more details about its near-term business targets and long-term strategic plan.
Source: General Motors Co.