GM: You Thought We Were Screwed Before, But You Were Much Too Optimistic
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Late yesterday, GMAC Financial announced that they will only finance customers will FICO scores of 700. Deutsche Bank broke down what this means for already wobbly General Motors (NYSE: GM).
The firm said, in GMAC's last securitization, sub-700 FICO scores encompassed 38.6% of the overall pool, which was down from the mid-40s in prior securitizations. They also note that GMAC finances 45% of GM's retail sales. They said developments in the credit markets will have broad negative implications for auto sales in the months ahead.
GM claims that bankruptcy is not an option, but, with money running out and already horrible sales getting worse, things don't look good. Shares of GM closed flat today at $6.54, but rallied significantly from Friday's $4 low-level.
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