USA: S&P AFFIRMS GENERAL MOTORS SENIOR DEBT.

Date: Jan 23, 1995

NEW YORK, Jan 23 (Reuter) - Standard and Poor's Corp said it affirmed the senior debt rating of General Motors Corp at BBB-plus.

S&P also affirmed GM's preference stock at BBB.

Favorable market conditions and the benefits of far-reaching restructuring actions have enabled a return to profitability at GM's core North American automotive operations over the last year, following massive losses during the recession, S&P said.

While additional strengthening of the North American Operations (NAO) financial performance is anticipated over the near term, concerns remain about its long-term profit potential and the extent to which results could deteriorate again in a recession, S&P said.

Nonetheless, with the improvement at NAO and with the substantial earnings contribution of GM's international automotive units and various other businesses, GM's overall results have reached very strong levels, it said.

Better operating cash flow has enhanced GM's liquidity and enabled the company to reduce its formerly huge unfunded pension liability to a more manageable level.

Efforts to substantially reduce the remaining portion of this liability will be facilitated by the expected completion of GM's proposed contribution of its Class E shares to the pension plan, S&P said.

S&P said General Motors outlook is positive.

The rating agency also affirmed debt ratings of General Motors' related entities.

S&P affirmed General Motors Acceptance Corp and various overseas subsidiaries' senior debt at BBB-plus and commercial paper at A-2.

It affirmed GM Hughes Electronics Corp senior debt at BBB-plus and commercial paper at A-2.

Electronic Data Systems Corp commercial paper was affirmed at A-2.

General Motors total consolidated debt is $69.2 billion, S&P said.

(c) Reuters Limited 1995. All rights reserved.