With General Motors Corp.'s corporate debt rating perched on the brink of speculative-grade territory by Standard & Poor's, most in the market seem to be confident about the spread stability on the issuer's outstanding ABS. But while most are confident, not everyone is.
"I wouldn't expect to see any spread widening in GMAC's CARAT or SWIFT programs," said a sell-side ABS analyst. He said GMAC's securitized debt is strong enough to withstand any nervousness that might seep into the ABS market from negative ratings news on the corporate front. "The risk of a negative outlook, and a downgrade, could possibly cause some panic selling [of the company's ABS], but even then investors should look at that as a buying opportunity," added the analyst.