General Motors Acceptance Corp.'s five-year credit default swaps widened approximately 30 to 40 basis points to 430-440 on news that its parent General Motors will increase its 2005 loss by $2 billion because of accounting irregularities. GM is delaying the filing of its 10K with the Securities and Exchange Commission to make changes to its accounting. The changes are linked to the classification of cash flows at ResCap, the residential mortgage subsidiary of GMAC. GM said its 2005 loss would increase to $10.6 billion, from $8.6 billion. GM has been in talks with various investor groups to sell a stake in GMAC, its finance arm. A GMAC spokeswoman did not return calls.
GMAC CDS Widens On GM Accounting Trouble