One of the key steps in General Motors recovery fell into place yesterday when Standard & Poor’s raised the company’s debt to a BBB-minus.
The bump signifies good financial health within the company and represents a milestone as GM continues to steer itself through the biggest batch of recalls in company history. In a statement released Thursday, CEO Mary Barra said the improvement is the result of “delivering segment-leading vehicles, improving the efficiency of our operations and building a fortress balance sheet.” Moody’s Investor Service upgraded GM’s debt to investment grade last fall.
S&P said it believes GM’s creditworthiness will remain strong over the next year or so despite recall-related costs.
This week the compensation fund GM established to pay victims of crashes related to defective ignition switches made offers to the first 15 claimants, including death cases that carry a minimum $1 million payout. So far, the fund officially attributed 21 deaths to the defective switches.