AFSCME 3357-HOF'S BLOG

From the Go Fitch file:
General Motors Becomes CCC Rider

Yesterday, the Fitch credit rating agency downgraded GM's credit rating to CCC, down from a previous rating of B-. Both are considered to be "junk" ratings. General Motor's main problem may not be the cost of credit, but the inability to get credit at all. Many of the banks and investment bankers that GM has dealt with are more more dire peril than GM itself. GM recently drew down its last $3.5 billion in its major credit line; most likely as a strategic move to avoid problems in the banking industry making that line unavailable later. Given GM's credit rating and the difficulties in the financial markets, GM may find it extremely difficult to get new capital, at least until next year. Even if Congress approves the release of $25 billion in auto industry loans previously authorized, GM (and the others) will not be able to get to the money until regulations are promulgated regarding the details of the lending program. That would not happen until sometime next year at the earliest.