S&P: GM bankruptcy not 'far-fetched'
Analyst makes gloomy statement after agency cuts rating of automaker to 'B'.
December 12, 2005: 4:43 PM EST
NEW YORK (Reuters) - A bankruptcy by General Motors Corp. is not a "far-fetched possibility" if current trends at the world's largest automaker persist, Standard & Poor's analyst Scott Sprinzen said Monday.
Speaking on a conference call after downgrading GM's ratings deep into speculative territory, Sprinzen said the rating agency felt it needed to be very direct about the risks its rating reflects.
Earlier on Monday, S&P cut its ratings on GM by two notches to "B," five notches below investment grade, from "BB-minus." The rating agency warned in its rating statement that GM may eventually need to restructure its debt if recent trends do not improve.
Shares of GM (Research) edged higher to close at $23.05 in regular trade on the New York Stock Exchange, but sank 1.6 percent in after hours trading.