Buy GMAC 2012 notes, hold on ResCap - KDP Advisor
NEW YORK, Nov 4 (Reuters) - Credit research firm KDP Advisor maintained its buy call for bonds of GMAC Financial Services after the lender posted a third straight quarterly loss on Wednesday.
GMAC, the traditional lender to General Motors Co [GM.UL], has received $12.5 billion in government bailouts, and reported a third-quarter net loss of $767 million, compared with a loss of $2.5 billion a year earlier. For details, click on [ID:nN04458359]
KDP said that GMAC, in particular, stands to benefit from additional government support, if required.
The research firm maintained its "buy" recommendation on the GMAC's 6.875 percent notes due in 2012 priced at 94 cents on the dollar, and a "hold" recommendations on ResCap bonds.
For the quarter, GMAC reported a pre-tax loss from continuing operations of $963 million, representing a sizable improvement from last year's pre-tax loss of $2.2 billion, KDP said.
Overall, "trends are reasonably favorable, as the company is making progress toward shrinking its balance sheet and focusing on its core businesses," the KDP report said.
The lender has struggled as the deteriorating auto and housing markets have caused financing volume to decline and credit losses to increase.
GMAC's owners include automaker General Motors and the private equity firm Cerberus Capital Management LP [CBS.UL]. (Reporting by Walden Siew, editing by W Simon )
