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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
October 25, 2004
(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 October 25, 2004, Dominion Bond Rating Service Limited (DBRS) confirmed
short-term ratings at R-1 (low) and downgraded long-term ratings to BBB (high),
all with stable trends, for General Motors Corporation (GM) and General Motors
Acceptance Corporation (GMAC). Their press release follows:
Date of Release: Oct 25, 2004
Downgrades Long-Term Debt to BBB (high), Confirms at R-1 (low), Removed from
Under Review - Negative
Current Date: Monday, October 25, 2004
Issuer Debt Rated Rating Action Rating Trend
------ ------------- ------------- ------ -----
General Motors Commercial Paper Confirmed R-1 Stb
Acceptance (low)
Corporation
-----------------
General Motors Commercial Paper Confirmed R-1 Stb
Acceptance (low)
Corporation (N.Z.)
Limited
-----------------
General Motors Commercial Paper Confirmed R-1 Stb
Acceptance (low)
Corporation (U.K.)
plc
-----------------
General Motors Commercial Paper Confirmed R-1 Stb
Acceptance (guar. by GMAC) (low)
Corporation of
Canada, Limited
-----------------
General Motors Commercial Paper Confirmed R-1 Stb
Acceptance (low)
Corporation,
Australia
-----------------
General Motors Commercial Paper Confirmed R-1 Stb
Corporation (low)
-----------------
General Motors of Commercial Paper Confirmed R-1 Stb
Canada Limited (low)
-----------------
GMAC Bank GmbH Commercial Paper Confirmed R-1 Stb
----------------- (low)
GMAC Commercial Commercial Paper Confirmed R-1 Stb
Mortgage Bank Europe, (low)
plc
-----------------
GMAC Commercial Commercial Paper Confirmed R-1 Stb
Mortgage Japan, K.K. (low)
------------------
GMAC International Commercial Paper Confirmed R-1 Stb
Finance B.V. (low)
-----------------
GMAC, Australia Commercial Paper Confirmed R-1 Stb
(Finance) Limited (low)
-----------------
General Motors Senior Long-Term Downgraded BBB (high) Stb
Acceptance Debt
Corporation
----------------
General Motors Medium & Long-Term Downgraded BBB (high) Stb
Acceptance Debt
Corporation (N.Z.)
Limited
-----------------
General Motors Notes & Debentures Downgraded BBB (high) Stb
Acceptance (guar. by GMAC)
Corporation of
Canada, Limited
-----------------
General Motors Medium & Long-Term Downgraded BBB (high) Stb
Acceptance Debt
Corporation,
Australia
-----------------
General Motors Long-Term Debt Downgraded BBB (high) Stb
Corporation
-----------------
General Motors Convertible Downgraded BBB (high)y Stb
Corporation Debentures
-----------------
General Motors Ind. Dev. Empower. Downgraded BBB (high) Stb
Corporation Zone Rev. Bds.,
S2004 (Issued by NYC
Ind. Dev. Agency,
Guar. by GMC)
-----------------
General Motors of Long-Term Debt Downgraded BBB (high) Stb
Canada Limited
-----------------
GMAC Bank GmbH Medium & Long-Term Downgraded BBB (high) Stb
-------------- Debt
GMAC Commercial Long-Term Debt Downgraded BBB (high) Stb
Mortgage Funding, plc
-----------------
GMAC Commercial Medium & Long-Term Downgraded BBB (high) Stb
Mortgage Japan, K.K. Debt
-----------------
GMAC International Medium & Long-Term Downgraded BBB (high) Stb
Finance B.V. Debt
-----------------
Note: General Motors Acceptance Corporation of Canada, Limited; General Motors
Acceptance Corporation (N.Z.) Limited; General Motors Acceptance Corporation,
Australia; GMAC Bank GmbH, GMAC Commercial Mortgage Funding, plc; GMAC
Commercial Mortgage Japan, K.K.; and GMAC International Finance B.V. debt is
guaranteed by General Motors Acceptance Corporation.
DBRS has downgraded the long-term debt ratings of the General Motors group of
companies ("GM" or the "Group") to BBB (high) from A (low), all with Stable
trends. With these rating actions, the Company has been removed from "Under
Review With Negative Implications".
In the past, the Group's rating has been influenced by two key factors: (1) the
long-term decline in GM's market share, and (2) high sales incentives, which
were impacting margins. However, three other key factors are influencing the
ratings, which resulted in the downgrades: (1) Rising health care costs. The
inability to drive health care cost increases down from GM's initial health care
cost inflation rate of 8.5% to its ultimate health care cost inflation rate of
5%. An upward revision to the initial trend rate (as recently indicated by
management) would cause an increase in the size of the net unfunded other
post-employment benefits (OPEB) liability ($57 billion as at December 31, 2003,
excluding Medicare subsidy of $4 billion). (2) Problems in GM Europe. The
problems in GM Europe are worse than expected and will be costly to remedy. The
Company's plan to lay off 12,000 personnel in Europe, particularly the 10,000
workers in Germany, will be costly and not without execution risk. (3) Rising
energy and material prices. High gasoline prices could impact the demand for
GM's highly profitable SUVs and pickup trucks. In addition, rising material
costs (steel and plastics) place further pressure on the already thin automotive
margins.
Nevertheless, the BBB (high) rating is still well supported by GM's favourable
balance sheet and good liquidity. DBRS expects that a solid introduction of new
vehicles should help stabilize market share over the next five years. Price
incentives have shown some evidence of moderating, which together with the
Company's long track record on cost reductions should help stabilize earnings.
Furthermore, General Motors Acceptance Corporation has a relatively liquid
portfolio of auto receivables, strong asset quality, and continues to generate
solid income. Thus, DBRS has assigned Stable trends to the long-term debt.
Dominion Bond Rating Service (DBRS) will publish a full report shortly that will
provide additional analytical detail on this rating action. If you are
interested in receiving this report, please contact us at: info@dbrs.com.
Information contained herein is obtained by DBRS from sources believed by it to
be accurate and reliable. Due to the possibility of human or mechanical error as
well as other factors, such information is provided "as is" without warranty of
any kind and DBRS, in particular, makes no representation or warranty, express
or implied, as to the accuracy, timeliness, completeness, merchantability or
fitness for any particular purpose of any such information. DBRS shall not be
liable in contract, tort or otherwise for: (a) any loss or damage in whole or in
part caused by, resulting from, or relating to, any error (negligent or
otherwise) or other circumstance or contingency within or outside the control of
DBRS or any of its directors, officers, employees, independent contractors, or
agents in connection with, or related to, obtaining, collecting, compiling,
analyzing, interpreting, communicating, publishing or delivering any such
information; or (b) any direct, indirect, special, consequential, compensatory
or incidental damages whatsoever (including, without limitation, lost profits),
even if DBRS is advised in advance of the possibility of such damages, resulting
from the use of or inability to use, any such information. In addition to the
foregoing, the rights of subscribers of DBRS are governed by the terms and
conditions of the applicable Subscription Agreement. In the event of any
conflict between this document and the Subscription Agreement, the Subscription
Agreement shall govern (without limitation, a conflict shall not include the
failure of the Subscription Agreement to cover a matter covered herein). The
credit ratings, if any, constituting part of the information contained herein
are, and must be construed solely as, statements of opinion and not statements
of fact or recommendations to purchase, sell or hold any securities.
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
-------------------------------------
(Registrant)
Dated: October 26, 2004 /s/ SANJIV KHATTRI
---------------- -------------------------------------
Sanjiv Khattri
Executive Vice President,
Chief Financial Officer and Director
Dated: October 26, 2004 /s/ LINDA K. ZUKAUCKAS
---------------- -------------------------------------
Linda K. Zukauckas
Vice President and Corporate Controller