General Motors Co. Chief Financial Officer Chuck Stevens said that the company plans to take advantage of its return to investment grade, which could lower borrowing costs, by strengthening its lending arm, Bloomberg News reported today. Standard & Poor’s Ratings Services upgraded both GM and General Motors Financial Co. to BBB- yesterday, citing progress in Europe, healthy cash flow and limited reputational and market-share damage as a result of the company’s record recalls. The upgrade is another step in the recovery of the onetime symbol of America’s industrial might as it rebuilds with a new finance unit focused on helping drive vehicle sales. GM was forced to sell control of its former GMAC lending unit to a hedge fund in 2006 to raise money to stay in business, and risky home loans ultimately forced that lender into bankruptcy. Now it has a smaller, more strategic finance arm that is getting stronger. The new GM Financial was formed out of the $3.5 billion purchase in 2010 of subprime lender AmeriCredit Corp. The GM lending unit bought Ally Financial Inc.’s international operations in South America and Europe in 2012 and is working to acquire the rest of Ally’s joint-venture operations in China, said Jim Cain, a GM spokesman.
