General Motors recaptures investment-grade credit rating

General Motors’ debt is again rated investment-grade for the first time since May 2005, which will reduce its borrowing costs.

Moody’s Investor Service raised GM’s corporate rating from Ba1 to Baa3, reflecting the automaker’s sustained profitability, its healthy U.S. product outlook and its growth in China.

“Good things happen when you build great cars and trucks and deliver strong financial results,” GM CEO Dan Akerson said in a statement. “Today’s news from Moody’s further underscores that this is exactly what we are doing today.”

For GM, the announcement could lower its cost of issuing new debt and could attract more interest from investors. It comes nearly four months after the automaker returned to the Standard & Poor’s 500 index, another milestone reflecting GM’s significant financial progress since its near-death experience.

“GM has been on a steadily improving operational and financial trajectory since it emerged from bankruptcy,” said Bruce Clark, senior vice president with Moody’s, in a statement. “We think that the disciplines the company has embraced, combined with the strength of its U.S. product portfolio and a healthy domestic market, will enable it to stay on that path.”

The automaker’s stock has recovered from a low of less than $19 in summer 2012 to about $37 today, which is 10% higher than its November 2010 initial public offering price.

GM started selling its highly profitable redesigned full-size pickup trucks this summer.

Akerson said in early June that the automaker was “on the cusp” of recapturing its investment-grade rating.

GM’s stock edged up 12 cents in early trading to $36.97.