right now 10 yr. GM paper is trading +375 over the 10-yr. which would imply a single-B rating. I forget the exact probabilitiy, but there is a high probability that a company which falls from investment grade to junk that it eventually either files chap. 11 or restuctures out of court (pre-pak), this is especially true for companies that go from investment grade to single-B in one shot. my bet is that IF GM gets downgraded it will only be one notch to the highest junk rating. I guess the rating agencies would rather suffer the embarrassment of whiffing on a ratings call than take all the heat they would get from the corporate CEO and the bankers.
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