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Fitch Upgrades General Motors Financial Company's Rating to ‘BB-’

November 02, 2010

NEW YORK — Fitch Ratings has upgraded the long-term issuer default rating (IDR) of General Motors Financial Company Inc. (GMF, f/k/a AmeriCredit Corp.) to 'BB-' from 'B+'. The upgrade was based on the company's relationship with General Motors Company (GM), which was recently assigned an IDR of 'BB-' by Fitch.

Fitch has removed the rating watch positive on GMF's ratings and assigned a stable outlook.

Fitch said the resolution of the rating watch follows an assessment of the linkage between GMF and GM, and GMF's positive core operating performance. Fitch's equalization of the ratings is driven by a perceived level of implicit support between GM and GMF, as evidenced by the re-branding of AmeriCredit and GMF's strategic importance in terms of providing loan financing to GM's subprime customers and improving its lease penetration rate relative to its automotive peers. While GMF plans to continue to originate loans through non-GM dealerships, Fitch believes the company's finance portfolio will become more heavily weighted toward GM business over time.

Fitch said if it needs to reevaluate the linkage between GM and GMF due to aggressive management of the finance subsidiary or a failure to support the entity in times of stress, GMF's ratings could be altered to reflect its creditworthiness on a standalone basis, although its rating would not be higher than GM, as long as it remains a wholly-owned subsidiary.

In addition, Fitch said the recovery ratings on GMF's senior unsecured debt have been removed following the upgrade of the IDR.

GMFC, based in Fort Worth, Texas, was established in 1992 as subprime auto lender, originating contracts by buying loans primarily from franchised dealers. The company had $8.7 billion in managed receivables as of June 30, 2010.

Fitch has upgraded the following:

General Motors Financial Company, Inc.

— Long-term IDR upgraded to 'BB-' from 'B+'.

Fitch has affirmed the following:

General Motors Financial Company, Inc.

— Senior debt affirmed at 'BB-'.

The Rating Outlook is Stable.

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