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NEW YORK, Nov 14 (Reuters) - Fitch Ratings on Friday affirmed its ratings on General Motors Corp. and its finance arm but said the outlook remains negative, citing concerns about pricing pressures, competition and pension and health care costs.
Fitch affirmed GM's and General Motors Acceptance Corp.'s senior unsecured ratings of "BBB-plus," its third-lowest investment grade, and commercial paper ratings of "F2." The negative rating outlook signals that a downgrade is likely over the next one to two years.
The rating affirmation reflects GM's recent negotiations with the United Auto Workers labor union, debt issuance, pension contributions in 2003 and general industry and market trends, Fitch said in a release.
"The successful completion of the UAW contract with no work stoppage demonstrates the commitment of the union and GM management to cooperatively address the competitive disadvantage of the Big Three," Fitch said.
Another rating agency, Standard & Poor's, rates GM and its finance arm roughly one notch lower than Fitch at "BBB," with a negative outlook. Moody's Investors Service rates GM "Baa1," roughly equivalent to Fitch's rating, and GMAC one notch higher at "A3" with a negative outlook
Yield spreads on GM's bonds were little changed on Friday. Its 8.375 percent bonds due 2033 traded at 2.52 percentage points more than Treasuries, about 0.01 percentage point tighter on the day, according to MarketAxess.
GM's shares fell 32 cents or 0.75 percent to $42.50 on the New York Stock Exchange in lunchtime trading.