DBRS Places ResCap Ratings Under Review with Negative Implications

DBRS has today placed all ratings of Residential Capital, LLC (ResCap or the Company), including its Issuer and Long-Term Debt rating of C, Under Review with Negative Implications.

This review placement follows GMAC LLC’s (GMAC), the parent of ResCap, announcement of its intention to commence an exchange offer for ResCap’s outstanding notes. DBRS’s review will consider the impact of the proposed transactions on the existing bondholders. Specifically, DBRS will also take into account the prospect of certain bondholders being provided with an exchange offer that is below par. Given that the proposed exchange does not fully reimburse bondholders at face value, in accordance with DBRS policy, upon completion of the exchange, DBRS expects that the debt that is exchanged will be placed in a default status.

The current rating level reflects DBRS concern about ResCap’s ability to continue as a going concern. The intensifying global credit market disruption has significantly reduced ResCap’s ability to obtain liquidity, capital and other forms of economic support from sources other than its parent, GMAC.