US corporate bonds: General Motors stable despite SEC investigation

General Motors Corp and its finance unit's bonds were little changed on Friday as the market considered the impact of the Securities and Exchange Commission's investigation of the ailing automaker's pension accounting practices.
Meanwhile, spreads in the overall high-grade corporate market ended unchanged to a touch wider.
GM said late on Wednesday it had received subpoenas related to its financial reporting for pension and other post-employment benefits. It also received subpoenas on GMAC, in connection with insurance industry probes of products that may help companies smooth earnings.
GM's bonds weakened on the news on concerns that the investigation will hinder the probable sale of its controlling stake in GMAC.
"The insurance inquiry is more troubling since it is directly related to GMAC's business," Shelly Lombard, an analyst at Gimme Credit, said in a research report.
"We believe the SEC investigations will delay, but not derail, the GMAC sale," Lombard wrote.
GMAC's 8 percent bond due 2031 ended unchanged at 103 cents on the dollar, according to MarketAxess. It has fallen from 106.37 cents on the dollar on Tuesday.
GM's 8.375 percent bond due 2033 fell more than a cent to 74 cents on the dollar.
While the investigation adds to GM's and GMAC's financial woes, some analysts think it will not hinder the parent company's progress in repairing its financial standing and the partial sell of GMAC.
"While GM has a plethora of well-documented problems, the newest SEC subpoena will not be the straw that broke the camels back, in our opinion," analysts at BNP Paribas in New York said in a research report.
"We also believe that the subpoena related to GMAC will not slow or deter potential suitors from finding GMAC attractive," they wrote.
The high-yield secondary market ended unchanged on Friday as the market anticipated new issuance next week, a trader said.
In other markets, US Treasury debt prices eased on Friday on data showing the US economy grew robustly in the third quarter despite a devastating hurricane season. The benchmark 10-year note fell 5/32 for a yield of 4.58 percent.