We expect a sell-off actions to" junk "
outraged reaction from Detroit:" Cash and adequate liquidity "to de-
Titles GM and Ford
For S & P "junk bond"
"skepticism about the strategies of management"
ROME - "Junk", that is rubbish . This became Standard & Poor's actions of General Motors and Ford . Not only the securities were downgraded to BB rating, that of "junk bonds", according to the agency but also the outlook, or the prospects of both companies, are negative.
In particular with regard to Ford, the downgrade, the rating agency said, reflects "the skepticism of the possibility that management's strategies are sufficient to meet the growing competition." S & P says it's also worried by the prospect that the field of sport utilities is no longer as profitable as in the past. There are also doubts about the ability of the sector SUVs, large SUVs, to generate the profitability achieved in the past.
The only response for now, come by the car manufacturer from Detroit who claims to have "adequate cash and liquidity." The agency has decided to downgrade the rating debt after GM reported the worst quarter of the last 13 years. At 31 December 2004, the automotive giant was counting on $ 300 billion in loans and bonds: GM says the most ever cut to junk company. Since 2001, Standard & Poor's has lowered three times the rating of the company.
Debt Gm hours are likely to suffer a sell-off since the investment fund may not hold in its portfolio securities classified as "junk." Meanwhile on Wall Street, GM has responded with a fall titles have lost more than 4 percent, while Ford shares were down 4.9.
(May 5, 2005)
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