Credit-rating agency Standard & Poor's said on Thursday it saw no near-term ratings impact for General Motors, Renault and Nissan from a possible alliance of the three carmakers.
Tracinda Corp, the investment vehicle for billionaire Kirk Kerkorian, has proposed that the three companies form a partnership, with Renault and Nissan buying a large minority stake in GM. For GM, "we do not see any near-term rating implications from the possible alliance, and some cost benefits could come from a partnership," S&P said in a report published on Thursday. "But we would be wary of the challenges of implementing such an alliance," the agency said.
S&P rates GM at B, five notches below investment-grade status, and is considering cutting the rating. It rates both Renault and Nissan at BBB+, three notches above speculative grade status.
The agency warned that "the ability of all three parties to structure, agree on, and execute manufacturing, purchasing and other benefits given the obvious complexity is suspect, and the track record of certain past attempts is mixed at best."
For Renault, S&P said that there were no near-term implications if industrial integration remained limited so that Renault's and Nissan's product capacities were not disrupted by issued related to GM. "Renault would also likely be protected from GM's huge liabilities, and its exposure would be limited to its equity investment," the agency said. For Nissan, S&P said a minor investment in GM would have only a limited negative impact on the company's financial standing, and again there were no near-term rating implications.