- Note: Earlier S&P cut the long term counterparty rating GMAC to CC from CCC
- This action is follows GMAC's launch of debt exchange offerings for debt in face amount totaling $38B ($29B GMAC; $9B Residential Capital, or "ResCap"). The outlook for the GMAC's ratings is developing. The downgrade of GMAC's ratings is based on Moody's view that the exchange offering is a distressed exchange, as it results in a diminished financial obligation for GMAC. Distressed exchanges are included in Moody's definition of default. In a related action, Moody's downgraded ResCap's senior unsecured rating to C from Ca and assigned a stable outlook
- The downgrade follows GMAC's announcement of an exchange offer for ResCap's senior secured, junior secured and substantially all of its unsecured bonds. The total principal value of bonds included in the exchange is approximately $9.3B. These bonds will be exchanged for either GMAC senior bonds or a combination of GMAC senior and subordinate bonds. Moody's considers this exchange to be a distressed exchange because the bonds being offered in exchange for ResCap's existing debt are being offered at a discount to par value and will have longer maturities. The discount to par value being offered in the exchange is substantial, in most cases no less then 45%. This is the second distressed exchange related to ResCap bonds in 2008.

Other headlines for [GM]

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