Why Did Fitch Ratings Upgrade GM’s Outlook?
Fitch Ratings, a global rating agency that analyzes value through credit opinions, research, and data, announced on Thursday that it had upgraded General Motors Co. (NYSE:GM) to a positive outlook from stable, illuminating the Detroit automaker’s continued turnaround.
The agency also hinted that GM’s issuer default ratings could see an upgrade within the next two years if performance in Europe improved while margins in North America grew. Fitch Ratings’ current issuer default rating for GM stands at BB+, which is just below investment-grade status. GM hasn’t been rated as investment-grade for nearly a decade, last seeing the positive rating in May of 2005.
While the news is a positive sign for GM, it wasn’t necessarily unexpected. GM’s chairman and CEO Dan Akerman explained that the Detroit-based car manufacturer was ”on the cusp of regaining our investment grade credit rating” in a May commencement speech to University of Notre Dame Medoza College of Business students.