Canadian Manufacturing

GM stock raised from junk status

Rating service Standard & Poor's lowered GM to junk status in 2005, four years before the automaker declared bankruptcy

September 26, 2014  by The Associated Press

DETROIT—Standard & Poor’s has returned General Motors to investment grade after rating it junk for nearly a decade.

The firm upgraded GM’s corporate credit rating one notch to BBB- from BB+, its lowest grade.

Standard & Poor’s Rating Services lowered GM to junk status in 2005, four years before its bankruptcy. The automaker recovered and earned $4.7 billion last year.

S&P says it expects GM will sustain its improving profits in North America and achieve profitability in Europe soon. It also noted GM’s strong sales in China.

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It says GM’s recall of more than 29 million vehicles this year is a negative but is manageable given the automaker’s strong liquidity.