Skip to main content
No. of Recommendations: 0
I thought the point of the thread is "why are GMAC's bonds so high yield, that is, viewed as risky by the market". That's what I've been trying to explain.

GM's troubles are known, and we were trying to determine why the parent's sins are infecting the child.

Obviously if GM goes bankrupt, either GMAC will be sold & the cash distributed to the GM's creditors, or GMAC will already have been sold and the cash from it will be

And it certainly should be illegal to split up a company and place the obligation of all the bonds in one half with the prime assets in the other half and then allow the weak half with all the bonds to default!

I totally agree, but if the owners want to do that, they can, unless the bond covenants say they can't.
Print the post  

Announcements

What was Your Dumbest Investment?
Share it with us -- and learn from others' stories of flubs.
When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and Glassdoor #1 Company to Work For 2015! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.