General Motors Acceptance Corp., the captive finance arm of General Motors Corp., plans this week to sell $3 billion of five-and 10-year global notes, an official for co-lead manager Banc of America Securities LLC said on Sept. 4.
The widely expected move comes as GMAC faces the possibility of a rating downgrade for its commercial paper, or short-term debt, from both Moody's Investors Service and Standard & Poor's. Both agencies warned last month of a possible downgrade, which could take place before the end of 2001.
A downgrade would shrink the investor pool for GMAC's short-term debt. Some industry analysts believe GMAC and Ford Motor Credit Co., the finance arm of automaker Ford Motor Co., will have to tap other capital markets to refinance that debt as it matures.
GMAC, which had $131 billion of debt outstanding as of June 30, has already shrunk its commercial paper exposure to $12.9 billion as of that date from $43.6 billion as of Dec. 31, according to a securities filing.
Moody's rates GMAC's long-and short-term unsecured debt "A2" and "P-1," while Standard & Poor's rates it "A" and "A-1," respectively. Lehman Brothers Inc. and Salomon Smith Barney are also arranging GMAC's sale.
