Fitch: GMAC and ResCap Remain on Rating Watch Evolving

Business Wire, Feb 8, 2006

NEW YORK -- Despite the lack of any formal announcement regarding a sale of GMAC, Fitch Ratings believes that progress towards a partial sale remains ongoing. As such, both General Motors Acceptance Corp. (GMAC) and Residential Capital Corp. (ResCap) and related GMAC entities remain on Rating Watch Evolving by Fitch, affecting approximately $141.7 billion of GMAC and ResCap debt at Sept. 30, 2005. Rating Watch Evolving indicates that ratings could be raised, lowered, or maintained at current levels.

Fitch currently rates both entities as follows:

GMAC

--Senior debt 'BB'.

ResCap

--Senior debt 'BBB-'.

It is Fitch's opinion that a sale would likely involve multiple parties, including financial sponsors, rather than a single strategic purchaser as originally intended. As such, any transaction could take a number of different paths. In considering various sale scenarios, Fitch will emphasize whether the chief objective, operational and legal independence from General Motors Corp. (GM), is achieved. In addition, Fitch will consider the resulting financial and governance structure and its effect on unsecured bondholders at GMAC and ResCap. This includes the role of financial sponsors and strategic purchasers. In Fitch's view, the involvement of financial sponsors does not necessarily preclude an investment grade rating, however, Fitch regards a purely passive role by a strategic purchaser diminishes the likelihood that GMAC's ratings would be raised from current levels.

Fitch also takes the view that potential bidders seeking to operate GMAC in its current form are strongly incented to establish GMAC with a financial profile that leads to obtaining competitive cost of funds and uninterrupted access to financing, and this will be a critical part of Fitch's evaluation of any sale transaction.

Fitch does expect tangible progress on a GMAC sale before the end of the first-quarter 2006 (1Q'06). If at that time, there is no definitive agreement, Fitch will reconsider the ratings of GMAC and ResCap, which could result in a downgrade or Rating Watch revision.

Fitch believes that the partial sale of GMAC Commercial Holding Corp. (GMACCH) will close in during 1Q'06, and Fitch's expected ratings for GMACCH and related entities are not affected by this action.

Fitch's rating definitions and the terms of use of such ratings are available on the agency's public site, www.fitchratings.com. Published ratings, criteria and methodologies are available from this site, at all times. Fitch's code of conduct, confidentiality, conflicts of interest, affiliate firewall, compliance and other relevant policies and procedures are also available from the 'Code of Conduct' section of this site.