GM Stock Offering May Boost Consideration From Auto Shoppers, Moody's Says
General Motors Co.’s initial public offering last week may help the largest U.S. automaker get consideration from car and truck buyers, according to Moody’s Investors Service.
“U.S. consumers who don’t know anything about over- allocation options or the need for strong liquidity in a cyclical industry knew that something exceptionally good happened to GM last week,” Bruce Clark, an analyst, wrote today in a research note. “That knowledge makes it more likely that they will consider buying a GM vehicle and possibly buy one. That’s good for the company’s credit quality.”
The financial benefits of the IPO, which raised more than $20 billion selling common and preferred stock, were “largely anticipated and are already reflected in the company’s rating,” Clark wrote.
Moody’s assigned GM a Ba2 rating, the second level below investment grade, on Oct. 11. New York-based Moody’s said it has a stable outlook on the Detroit-based automaker.
Deliveries by GM in the U.S. rose 6.6 percent to 1.82 million vehicles through October, compared with an 11 percent gain for the industry, according to researcher Autodata Corp. in Woodcliff Lake, New Jersey. Sales of cars and trucks by Chevrolet, GM’s volume brand, increased 18 percent, helped by the Silverado pickup and Equinox sport-utility vehicle.
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