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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
August 2, 2005
(Date of report; date of
earliest event reported)
Commission file number: 1-3754
GENERAL MOTORS ACCEPTANCE CORPORATION
(Exact name of registrant as specified in its charter)
Delaware 38-0572512
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
200 Renaissance Center
P.O. Box 200 Detroit, Michigan
48265-2000
(Address of principal executive offices)
(Zip Code)
(313) 556-5000
(Registrant's telephone number, including area code)
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions (see General Instruction A.2. below):
[ ] Written communications pursuant to Rule 425 under the Securities Act
(17 CFR 230.425)
[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act
(17 CFR 240.14a-12)
[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 240.14d-2(b))
[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act (17 CFR 240.13e-4(c))
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Item 8.01 Other Events
On August 2, 2005, Dominion Bond Rating Service (DBRS) downgraded the long-term
debt rating of General Motors Acceptance Corporation and its subsidiaries to BBB
(low) from BBB, and the short-term debt rating was downgraded to R-2 (low) from
R-2 (middle). The trend remains negative. Their press release follows.
DBRS Downgrades GMAC & Related Subsidiaries
Downgrades to BBB (low), R-2 (low)
Date of Release: August 2, 2005
Dominion Bond Rating Service ("DBRS") has today downgraded the ratings of
General Motors Acceptance Corporation ("GMAC") and its subsidiaries to BBB (low)
and R-2 (low) for the long-term debt and short-term debt, respectively. The
rating trend remains Negative. The ratings are removed from "Under Review with
Negative Implications", where they were placed on July 22, 2005.
This rating action is entirely due to DBRS's concurrent downgrade of the ratings
of General Motors Corporation ("GM").
The rating action principally reflects the much worse than expected performance
at GM's North American operations, an eroding position in its most important
North American market, and the lack of solid progress to date to control rising
health care costs. GM's much weakened credit profile is no longer compatible
with an investment-grade rating. Moreover, the full benefits of GM's most
significant product program, the T-900 program, are at least two years away and
the ability of GM to restore its credit profile is uncertain because of the
intensifying competitive environment in North America. See separate DBRS press
release on GM for more details.
GMAC continues to perform well, but earnings declined modestly as weaker
Financing operations were only partially offset by stronger Mortgage operations
and Insurance operations. Lower Financing results reflect the impact of higher
interest rates and rising borrowing costs. GMAC continues to focus on
diversifying its funding sources given its reduced access to unsecured debt
markets at a reasonable cost. The recently announced US$55 billion committed
whole loan sale agreement (over five years) is a further step towards
management's "originate and sell" business model. Structural subordination
should not be an issue, so long as the future proceeds are allocated toward the
reduction of unsecured debt.
Asset quality, balance sheet leverage, and liquidity remain respectable. GMAC
has more than sufficient maturing receivables to meet maturing debt obligations.
Overall, GMAC is a source of earnings stability and dividends for GM.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
GENERAL MOTORS ACCEPTANCE CORPORATION
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(Registrant)
Dated: August 4, 2005 /s/ SANJIV KHATTRI
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Sanjiv Khattri
Executive Vice President,
Chief Financial Officer and Director
Dated: August 4, 2005 /s/ LINDA K. ZUKAUCKAS
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Linda K. Zukauckas
Vice President and Corporate Controller