General Motors Co. is aiming for an investment grade credit rating "within the year," the carmaker disclosed in slides posted online. During presentations to analysts at GM’s test track in Milford, Michigan, chief financial officer Ammann did not use the words on the slide but instead said that the company is obviously targeting an investment grade rating “as soon as possible.”
He added that they are working toward the goal, which they hope to achieve in the near term. Smaller rival Ford Motor Co. achieved an investment grade credit rating in 2012, enabling it to get lower rates on borrowing.
The rating also increased the number of potential buyers for its bonds. In January 2013, GM chief executive Akerson said he hoped the carmaker would achieve an investment grade credit rating this year. The same month, GM treasurer James Davlin said that the carmaker was "trending toward investment grade."
The stigma of GM’s financial collapse in 2009 has continued to somewhat hurt the carmaker’s sales. Although GM executives have boasted of the company’s "fortress balance sheet," investors are raring to see GM’s money-losing unit in Europe return to black and to see the exit of the US Treasury as a shareholder.
GM is aiming to achieve a break-even in Europe by mid-decade while the US Treasury is intending to divest of its stakes in the carmaker by April 2014. Amman remarked that investors can expect the GM’s balanced approach to using its cash to continue with the current focus on new-vehicle launches and making its European operations achieve profit. [source: Reuters]