Key Trends in the Automotive and Finance Industries

Last week saw significant shifts in the automotive and finance sectors, with various companies experiencing gains or losses in their bond values. Key gainers included General Motors Corp. and General Motors Acceptance Corp., while airlines such as Northwest Airlines Corp. and Delta Air Lines, Inc. saw substantial losses. The fluctuations were largely influenced by factors such as company performance, credit ratings, and industry trends.

Key Takeaways:

• General Motors Corp. plans to cut benefits, with the United Auto Workers union receptive to concessions.
• General Motors Acceptance Corp. made $2.5 billion in profit and will pass $2 billion in dividends to GM, with its bonds trading up by as much as nine points.
• Delphi Automotive Systems completed a $2.8 billion refinancing package and was upgraded by Deutsche Bank, with its 6.5% notes trading up from 75 to over 80.
• Ford Motor Company was also upgraded by Deutsche Bank and is executing a $100 million initial public offering for The Hertz Corp.
• Ford Motor Credit's 5.55% bonds due 2011 gained seven points to end the week at 86.125 points.
• Airlines were the chief losers, with Northwest Airlines Corp.'s and Delta Air Lines, Inc.'s bonds slipping between four and seven points.
• Enterprise Products Partners LP's 6.65% notes due 2034 went from 110.75 points to 106.375 points after a ratings upgrade.

Statistics:

• General Motors Acceptance Corp. made $2.5 billion in profit last week.
• GMAC's bonds traded up by as much as nine points.
• Delphi Automotive Systems completed a $2.8 billion refinancing package.
• Ford Motor Credit's 5.55% bonds due 2011 gained 7 points.
• Enterprise Products Partners LP's 6.65% notes due 2034 dropped 4.375 points.

Sources:

• High Yield Report and SourceMedia, Inc.
• http://www.highyieldreport.com
• http://www.sourcemedia.com