Bailout Watch 511: S&P: We Do Not View Possible Further Government Support As Open-ended

by Edward Niedermeyer

Published: April 27th, 2009

bailout watch 511 s p we do not view possible further government support as

“Our ‘CC’ corporate credit rating on GM continues to reflect our opinion that there is a high likelihood that the company will undergo a distressed debt exchange (which we would consider tantamount to a default under our criteria) or file for bankruptcy protection toward the end of May or shortly thereafter.

In our opinion, a bond exchange on the terms proposed might be difficult to accomplish, given GM’s desire for a high threshold for participation by noteholders. GM estimated it would need to receive 90% of the total principal of the notes in the tender offers to satisfy the U.S. Treasury Department’s conditions and avert a bankruptcy. However, we believe it is possible that theTreasury Dept. might accept a smaller amount if all of its other conditions are met.’

Edward Niedermeyer

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4 of 12 comments

MikeyDee on Apr 28, 2009

Now some good news... The "new" GM will be more focussed, with new management and a new approach. They will rethink their whole business model and in five years, their products will be very good. The bad news is... They lost me, because I had nothing but trouble with GM cars over the years and now that I'm a Honda guy, GM has to prove to me that their products are of better quality. I think that's fair, don't you?

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Superbadd75 on Apr 28, 2009

I'm on board with jwolfe and kowsnofskia, no excuses, kill all of BPG. If Buick is so damn popular in China, Cadillacs or dressed up Chevys can be sold there as Buicks. With so much overlap, there is point. All they're doing is cannibalizing sales from other brands. Not to mention that shuttering all 3 brands would solve the problem of how to get rid of 42% of their retail outlets. Go C11, drop the riff raff, and roll on with Chevy and Caddy.

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Tpandw on Apr 28, 2009

Mikey is partly right, I think, in that there will always be some buyers (although their numbers are going down) who detest anything perceptibly foreign and want to buy only American. Where I disagree is his suggestion that GM is their only option. It seems to me that Ford is playing this whole thing extremely well and can remain a domestic option without the taint of taxpayer-financed bailout. I also agree with those who propose euthanizing all of BPG. As superbadd75 says, if Buick is so popular in China, keep selling it there--why does that mean that GM fritters resources trying to make this pathetic brand popular with anyone under 70 here.

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Mykeliam on Apr 28, 2009

Here's a really wild one: Why not keep the BPG and get rid of the other ones?? Sorry, I had to get that wild hair out of my ass! OK I realize that Caddy is the bright spot. I was just an idea!!!

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