TEXT-S&P: General Motors' announcement has no rtg effect

Wed Dec 19, 2012 9:17am EST

Dec 19 - Standard & Poor's Ratings Services said today that the announcement by General Motors Co. (GM; BB+/Stable/--) that it will spend up to $5.5 billion to acquire 200 million of its common stock held by the U.S. Treasury (UST) has no impact on the ratings on GM.

Under the agreement announced today, GM will use $5.5 billion, and the UST has committed to disposing of its remaining shares (representing about a 19% stake in GM) over the next 12 to 15 months. The UST is also relinquishing certain governance rights.

We view the use of cash as well within GM's current liquidity--automotive cash, cash equivalents, and marketable securities, which totaled $31.9 billion as of Sept. 30, 2012, and availability under the new $11 billion credit facility. The eventual full exit of the UST from GM ownership clarifies the uncertainty regarding the longer term ownership structure and is a credit positive in our view.

A couple walks along the rough surf during sunset at Oahu's North Shore, December 26, 2013. REUTERS/Kevin Lamarque

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