The announcement that General Motors Corp. is exploring the sale of a controlling stake in its financing arm, General Motors Acceptance Corp., had ABS market participants speculating about the possible impact a sale would have on its outstanding retail auto loan and wholesale dealer floorplan deals. While the main concern surrounds the dealer floorplan ABS, the market will likely not be able to gauge the true impact of the sale until a potential buyer steps forward. Overall, however, the market reaction was one of relief. "This could be a huge positive for GMAC," said one ABS analyst.
With a possible sale netting in the area of $11 billion to $15 billion, there are few entities for whom the deal would make sense, among them are Bank of America Corp., HSBC Holdings and GE Capital, according to reports. The deal would not only give GM an infusion of capital to assist its ailing operations, but, if bought by an investment-grade entity, could improve GMAC's credit rating and its access to the unsecured debt markets.