DETROIT, Sept 25 (Reuters) - General Motors Co's corporate debt was raised by Standard & Poor's to investment grade, another critical step in the automaker's long recovery from its 2009 bankruptcy and reorganization.
S&P on Thursday lifted GM to BBB-, after downgrading the debt of GM's predecessor to junk-bond status in 2005. The new rating reflects the automaker's improving financial condition, the ratings service said Thursday.
In a statement, GM Chief Executive Officer Mary Barra said the upgrade was the result of "delivering segment-leading vehicles, improving the efficiency of our operations and building a fortress balance sheet."
Dogged this year by a safety crisis over defective ignition switches now linked to at least 21 deaths, GM has lagged the market, with its stock down 19 percent. GM stock rose 18 cents after hours to 33.05.
S&P, which also upgraded GM Financial to BBB-, said it believes GM's creditworthiness "will remain strong over the next year or so, even after recall-related costs."
Moody's Investors Service, one of two other major ratings firms, lifted GM to investment grade last fall. Both Moody's and S&P had downgraded the automaker's predecessor to junk status four years before GM was forced into bankruptcy.
After spinning off most of its debt in a government-sponsored "quick rinse" reorganization, the "new" GM held an initial public offering in November 2010. (Reporting by Paul Lienert in Detroit; Editing by Cynthia Osterman)