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GM $1.5B Global Issues Rated 'A' by Fitch IBCA

20 April 1998

GM $1.5B Global Issues Rated 'A' by Fitch IBCA - Fitch IBCA Financial Wire -

    NEW YORK, April 20 -- General Motors Corp.'s (GM) three new
senior debt issues totaling $1.5 billion principal amount are rated 'A' by
Fitch IBCA.  The company will sell these issues in global offerings with
maturities at 2005, 2008 and 2028.  In addition, GM's commercial paper program
is affirmed at 'F1', senior debt at 'A' and trust originated preferred
securities at 'A-'.  Essentially, GM will use the proceeds of the new issues
to fund its VEBA Trust, thus reducing future post-retirement benefit
liabilities.
    The ratings reflect the company's continued healthy cash generation,
supported by tangible progress in structural cost reduction, as well as a
stable balance sheet, leverage and credit protection.  To offset limited
pricing flexibility, GM aims to lower its structural costs by $4 billion in
1998; it achieved material and manufacturing cost savings of $1.2 billion in
the first quarter, about evenly divided between the U.S. and the rest of the
world.  EBITDA interest coverage was 10.3 times (x) for the twelve months
ended March 31, 1998 and total debt/EBITDA at that date was 0.7 times; these
levels are consistent with the current rating, but somewhat lower than GM
achieved in recent years.
    Concerns center around GM's weakened U.S. market shares, which the company
has recently supported through enriched sales incentives and which are likely
to continue at high rates over the near term.  GM also needs to improve its
margins and competitiveness through attractive product flow and continued
lowering of unit costs.

SOURCE  Fitch IBCA, Inc.