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From Bloomberg:
Bonds of GMAC LLC’s Residential Capital division, or ResCap, were cut to “neutral” from “buy” by Banc of America Securities LLC following the departure of two top finance executives.
GMAC announced the resignation of ResCap’s chief financial officer, James Giertz, on March 23. Three days earlier, treasurer Louise Herrle said she planned to leave in April. The company attributed the resignations to personal reasons. Yield premiums on ResCap bonds have increased since the beginning of the year on concerns about rising default rates on subprime mortgages.
“We view the departure of ResCap’s two most senior finance executives as a significant negative given the challenges the company is facing,” Banc of America credit analyst John Guarnera in Charlotte, North Carolina, wrote in a research note today.
Why am I so cynical these days that when I see top execs leaving I say "stop thief"? I don’t think its fair, but then neither is running shareholder value in to the ground by poor management decisions. I would expect that more executives will be jumping ship here (by choice or not) as the rest of this story plays out.
Last 3 posts by Morgan
- Subprime Bananas - June 28th, 2009
- Roubini: No confidence in government exit strategy - June 24th, 2009
- Goldman bonuses largest in firm's 140-year history - June 21st, 2009
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