GMAC and Residential Capital (ResCap) took ratings cuts today that brought their ratings deeper into junk territory, as Standard & Poor’s and Fitch Ratings both took actions against the specialty finance entities.

Fitch Ratings cut its issuer default rating on GMAC to ‘B+’ from ‘BB-’ on concerns that it might have to borrow against its assets to enhance its liquidity position. ResCap’s rating was cut to ‘C’ from ‘BB-’, after the company announced that it would exchange $12.8 billion in current debt for new debt secured by assets.

Citing similar concerns about ResCap’s planned debt restructuring, Standard & Poor’s said it would lower ResCap’s long-term corporate credit rating to 'CC' from 'CCC+.'

“A successful exchange would extend debt maturities, providing needed relief, but the action illustrates the gravity of the company's financial position,” S&P said.

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