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Why were stronger credit ratings important to gmac

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Reference no: EM133060219

Book: Author: Cerberus and the U.S. Auto Industry Investment banks hedge funds and private equity 3rd edition

David P. Stowell

1. What were the potential positives and negatives of this transaction for GM? For GMAC? For Cerberus?

2. Should Cerberus's status as a "financial" investor, as opposed to a "strategic" investor, impact the rating agencies' analysis of GMAC?

3. Why were stronger credit ratings important to GMAC?

4. What were the implications of GM's call option on GMAC's auto finance business? 5. What are the potential conflicts of interest that arise from second-lien lending?

6. With the benefit of hindsight, how did the GM and GMAC investments work out for Cerberus? (Answer this question in just 2-3 sentences, after briefly looking at outside sources.)

Reference no: EM133060219

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