Despite a downgrade in credit ratings, General Motors Acceptance Corp. (GMAC) and Ford Motor Credit Co. do not plan to raise interest rates on their vehicle loans or inventory credit lines for dealers.

Because of GM’s and Ford Motor Co.’s junk status, lowered by Standard & Poor’s last week, both companies now have reduced abilities to raise money by issuing bonds, which increases their long-term borrowing costs, reported The Associated Press.

Anticipating this drop in credit ratings, GMAC and Ford Credit, both affected by the lower ratings along with their manufacturers, have looked into new ways of borrowing money.

"Both companies have taken measures to decrease their reliance on commercial paper and increase their reliance on asset-backed securities," said Eric Selle, a director at Wachovia Securities in Charlotte, N.C.

Both GMAC and Ford Credit have borrowed money by selling asset-backed securities, which include vehicle loans and leases, to investors. Eight billion dollars of Ford Credit’s $12 billion raised this year is in asset-backed securities. GM’s debt in corporate bonds dropped from two-thirds in 2001 to one-third in January.