General Motors Acceptance Corp.'s five-year credit default swaps tightened 60 basis points to 380 on the market's expectation that parent General Motors would sell a controlling stake in the finance unit soon. A trader said GMAC's CDS and bonds were tighter on hopes the sale would be announced as early as today. The CDS traded as low as 375 basis points, according to GFI Group. GMAC's 8% '31 bonds were up to 93 1/2 from 91 1/4. Among the possible buyers is Kohlberg Kravis Roberts & Co and an investor group led by Cerberus Capital Management. Spokespeople at both firms did not return calls by press time.
GM's bonds also fell slightly Friday after Delphi Corp. announced it would file motions with the U.S. Bankruptcy Court to reject labor agreements and modify retiree benefits. GM's '33 bonds were down a point to 73 1/2. GM's revolver also increased last week after the company said it may have to refinance the credit facility (see story, page 7). Hearings are scheduled for May 9 and 10. The court has provided a five-week period between the filing of the motion and the court hearing so Delphi and its unions can continue working on consensual agreements. A Delphi spokeswoman said that although the court filings are necessary to protect Delphi's business, it remains committed to negotiating with its unions. A GM spokeswoman did not return calls by press time.