GMAC Considers Separate Mortgage Unit

Published on:
12 September 2006 at 10:18 a.m. ET

Written by: Unknown Author –

http://www.insidearm.com/news/00003914-gmac-considers-separate-mortgage-unit/

The finance arm of General Motors Corp. on Thursday said it was considering setting up a separate subsidiary for its residential mortgage lending business, in a move analysts said was meant to protect the mortgage operations in case GM’s debt ratings are cut to junk.

GM and its financing arm are rated one step above junk status by Standard & Poor’s, and a cut could dramatically increase the companies’ borrowing costs.

Given the head winds GM faces this year, including high health-care costs and rising interest rates, getting cut to junk status is possible, analysts said.

Bonds and GM shares fell after General Motors Acceptance Corp. said it is considering placing its residential mortgage operations in a newly formed holding company to be named Residential Capital Corp.

For this complete story, please visit GMAC Considers Separate Mortgage Unit.

GMAC Considers Separate Mortgage Unit

Unknown Author

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