Saturday, September 30, 2006

GMAC may sell bonds again

Tuesday, September 12, 2006
GMAC may sell bonds again
Bloomberg News
General Motors Corp. is planning its bond market comeback.

General Motors Acceptance Corp., the finance subsidiary of the world's biggest carmaker, may sell the first bonds in two years once a group of buyout firms purchases a stake in the unit, said Joanne Krell, a spokeswoman for GMAC in Detroit. The sale may be completed by the end of the year, she said.

A return to the bond market would signal increasing investor confidence after the company's credit ratings were cut to non-investment grade in May 2005. GMAC debt, a benchmark for investors for more than 30 years, has rallied in the past 12 months. The difference between the yield on its $4 billion of 8 percent bonds due in 2031 and Treasuries with similar maturities is the narrowest in five years.

"At the end of the year, GMAC's probably going to be back in investment grade," said Daniel Fuss, who oversees more than $23 billion in fixed income as vice chairman of Loomis Sayles & Co. in Boston. "On that basis, the bonds are cheap."

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