Although GMAC exceeded a Nov. 9 deadline for raising as much as $5.6 billion of additional capital, Moody’s Investors Service analysts believe the firm will obtain additional capital from the U.S. Treasury within the next few weeks.

GMAC’s need for additional capital is based on the results of U.S. government stress tests conducted earlier this year that addressed the capital risks of several large U.S. bank holding companies. The U.S. Treasury has already injected $12.5 billion into GMAC over the past year.

“If GMAC satisfies its regulatory requirement for incremental capital and also mitigates the support risks of its mortgage finance subsidiary Residential Capital [LLC] (ResCap), we might upgrade GMAC’s long-term ratings by multiple notches,” said Mark Wasden an analyst at Moody’s. The company is currently rated 'Ca' senior unsecured on review for possible upgrade.

However, GMAC is contending with other issues — including the weak condition of the U.S. domestic auto industry and execution risks as it continues its transition to a bank funding and operating model — that continue to weigh on its credit profile and ratings.

 

Subscribe Now

Access to a full range of industry content, analysis and expert commentary.

30-Day Free Trial

No credit card required. Access coverage of the securitization marketplace, including breaking news updated throughout the day.