Research Update: General Motors Co. 'BBB' Rating Affirmed And Removed From CreditWatch; Outlook Negative

General Motors Co. (GM) experienced a historically steep year-over-year revenue decline in second-quarter 2020 because of plant shutdowns that arose from the COVID-19 pandemic. We believe the uncertainty related to the pandemic is ongoing and introduces risk to our base-case forecast for GM's sales, profitability, and cash flow. While U.S. light-vehicles sales were down about 47% year-over-year in April, each successive month showed improvement, with sales in May down about 30% and June down about 24%. We are taking our ratings on GM off CreditWatch with negative implications. We are affirming our 'BBB' issuer credit rating and issue-level ratings. Our rating action was not a result of today's resignation of CFO, Dhivya Suryadevara. We believe GM has sufficient managerial depth

...- General Motors Co. (GM) experienced a historically steep year-over-year revenue decline in second-quarter 2020 because of plant shutdowns that arose from the COVID-19 pandemic. We believe the uncertainty related to the pandemic is ongoing and introduces risk to our base-case forecast for GM's sales, profitability, and cash flow. - While U.S. light-vehicles sales were down about 47% year-over-year in April, each successive month showed improvement, with sales in May down about 30% and June down about 24%. - We are taking our ratings on GM off CreditWatch with negative implications. - We are affirming our '###' issuer credit rating and issue-level ratings. - Our rating action was not a result of today's resignation of CFO, Dhivya Suryadevara. We believe GM has sufficient managerial depth to address this departure. - The negative outlook reflects our view that there is at least a one-third chance that we could lower the ratings if, for instance, GM's debt-to-EBITDA ratio exceeds 3x during...

Research Update