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DCR Rates GMAC's Eurobond Offering 'A-'

7 May 1998

DCR Rates General Motors Acceptance Corp.'s 500 Million Euro Eurobond Offering 'A-'

    CHICAGO, May 7 -- Duff & Phelps Credit Rating Co. (DCR) has
assigned a 'A-' (Single-A-Minus) rating to General Motors Acceptance Corp.'s
(GMAC) 500 million euro eurobond offering.  The bonds pay a coupon rate of
12.5 basis points over three-month ECU Libor and were priced at 99.843.  The
bonds mature May 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 improved modestly during 1997 reflecting the
use of more stringent underwriting guidelines and more aggressive collection
efforts.  While the frequency of retail loss increased slightly during 1997,
severity was lower  despite softness in used car values.  Wholesale asset
quality measures remain strong with losses well below the historical average.
    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.