NEW YORK -- Standard & Poor's on Thursday downgraded the debt ratings for General Motors and its finance unit to one step above junk status, citing increased concerns about the profitability of the company's automotive operations.
The bond market had anticipated the move, so the downgrade is not likely to materially impact GM's borrowing costs.
GM on Thursday reported weaker-than-expected earnings of $440 million for the third quarter compared with $425 million a year ago. The third-quarter ratings include a loss of $130 million from the company's automotive operations, but $656 million of gains from the company's finance arm, General Motors Acceptance Corp.
S&P lowered the long-term corporate credit ratings for GM and GMAC one notch to BBB-minus, or one step above junk, from BBB, and the short-term rating to A-3 from A-2. The outlook is stable.