S&P cuts GMAC, ResCap ratings, outlook negative

LONDON, Feb 22 (Reuters) - Standard & Poor's on Friday cut its credit ratings on GMAC LLC, the auto-financing business owned by Cerberus Capital Management [CBS.UL] and General Motors Corp. GM.N, and mortgage unit Residential Capital LLC.

S&P cut GMAC three notches to B+ and Residential Capital four notches to B, the ratings agency said in a statement. It said the ratings outlook for both companies was negative, suggesting further downward pressure.

The agency said both companies faced difficult funding environments, while Residential Capital, which is owned by GMAC, also faces potential lower support from ultimate parents Cerberus and GM.

It said possible further losses at Residential Capital put it at risk of breaching a covenant, boosting the probability of support being needed.

For S&P's full statement, please double click on [ID:nWLB7600]. (Reporting by Richard Barley; Editing by Quentin Bryar)