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DCR Rates GMAC (Canada)300 Billion Italian Lira Floating-rate Eurobond Offering 'A-'

29 January 1998

DCR Rates GMAC (Canada)300 Billion Italian Lira Floating-rate Eurobond Offering 'A-'

    CHICAGO, Jan. 29 -- Duff & Phelps Credit Rating Co. (DCR) has
assigned a 'A-' (Single-A-Minus) rating to General Motors Acceptance Corp. of
Canada, Ltd.'s (GMAC Canada) 300 billion Italian Lira floating-rate Eurobond
offering, guaranteed by General Motors Acceptance Corp. (GMAC).  The bonds pay
a coupon rate of 15 basis points over three-month Libor, were priced at 99.82.
and mature February 20, 2003.
    GMAC's ratings reflect its close marketing and financial ties with parent
General Motors Corp. (GM) and GMAC's typically strong asset quality and
profitability measures.  GM's restructuring efforts are critical to its
ongoing efforts to achieve a leaner cost structure and more effective product
line strategy.  Due to the continued growth in the retail operating lease
portfolio and the partial residual risk borne by GM, DCR believes the credit
rating relationship between GM and GMAC has been strengthened.
    For the year ended December 31, 1997, earnings were $1,301 million, versus
$1,241 million for the year ended 1996.  This increase was due mainly to solid
performance and growth in the insurance and mortgage financing operations.
Retail finance volumes will remain partly dependent on GM's sales volumes and
incentives.
    Retail asset quality measures have eased somewhat following the strong
industrywide performance in recent years.  In response, management has
tightened credit standards on new originations and instituted more aggressive
collections efforts.  These strategies have stabilized retail credit quality.
Wholesale asset quality is expected to remain solid.
    Leverage has increased slightly due to the improved cost of balance sheet
debt, relative to securitization funding.  Leverage is now targeted in the
9-to-10:1 range.  Bank facilities limit leverage to 11:1.

SOURCE  Duff & Phelps Credit Rating Co.