General Motors Company (GM): Moody’s Restores Debt To Investment Grade Status
General Motors Company (NYSE:GM) debt has been restored to investment grade status by Moody’s Investors Service. General Motors lost the investment grade status eight years ago as they were stumbling towards bankruptcy protection. The upgrade happened this morning shortly after GM bought back high-interest preferred stock from the UAW for $3.2 billion.
Moody’s Investors Service increased GM’s corporate debt from Ba1 (junk status) to Baa3 (lowest investment grade rating). Both Fitch and Standard & Poors still has GM at junk status. This upgrade will most likely cause GM to get lower interest rates when borrowing money in the future. GM’s credit ratings have been in junk mode since 2005.
GM shut down plants and erased most of their debt when filing for bankruptcy in 2009. They have been making a profit every year since 2010.
Fitch increased GM’s outlook to positive from stable and said that they could upgrade GM within two years. Standard and Poors raised GM’s outlook to positive earlier this month.
“Good things happen when you build great cars and trucks and deliver strong financial results,” stated General Motors Company (NYSE:GM) CEO Dan Akerson.