Fitch Drops GM Rating Again
Fitch Ratings lowered General Motors' credit rating further into "junk" status, saying the automaker has made little progress in reducing costs and is vulnerable if gas prices remain high. Fitch first cut GM to junk -- or high-risk, high-yield -- status in May. The latest action, which applies to GM and finance arm General Motors Acceptance Corp., lowered the rating one more level to BB, two levels below investment grade. Standard & Poor's and Moody's have also cut the automaker's rating to junk, generally making it more expensive for GM to borrow and refinance debt.
Delta Retirees Press for Payment
Delta Air Lines' retired pilots asked a federal judge to order the third-largest U.S. carrier to make its October pension contribution to ensure the plan's survival. Delta, which filed for bankruptcy Sept. 14, sent letters to 4,500 pensioners saying it will not make the payment.
The decision might prompt the Pension Benefit Guaranty Corp. to terminate the airline's retirement plans, the Delta Pilots' Pension Preservation Organization said. The Atlanta-based airline needs court permission to make the payments and, citing financial pressures, has not made such a request.
Conde Nast Reorganizes
Magazine publisher Conde Nast has overhauled its corporate structure, folding together two corporate siblings that had operated separately and changing reporting lines. Fairchild Publications -- publisher of W, Jane and Women's Wear Daily -- now will be under the same roof as Conde Nast, which publishes The New Yorker, Vanity Fair, Vogue and Gourmet.
A company spokeswoman said the changes were "absolutely not" a precursor to a potential sale of the company or an initial public offering.
McClatchy Authorizes Buyback
McClatchy, which publishes the Sacramento Bee, the Minneapolis Star Tribune and 27 other newspapers, said its board authorized the company's first stock buyback program. As much as $200 million in shares will be repurchased, the company said.
Lowe's Class Action Certified
A federal judge has certified a class-action lawsuit against Lowe's Home Centers, the nation's No. 2 home-improvement chain, for employees seeking unpaid overtime. As many as 75,000 Lowe's employees could be represented in the case. Workers claim the company unfairly denied them full overtime pay.
AIG Alters Compensation Plan
American International Group approved a deferred compensation plan to replace a program with ties to ousted chief executive Maurice R. "Hank" Greenberg. The new program covers 2005 and 2006, giving executives deferred stock awards if earnings from the two-year period are higher than profit for 2003 and 2004, AIG said in a filing with the Securities and Exchange Commission. The plan is funded by AIG, rather than Starr International, a Panama-based company controlled by Greenberg.
For 30 years, Starr had paid hundreds of millions of dollars in deferred compensation to retain AIG executives at no cost to the company. AIG eliminated the program amid a regulatory investigation of accounting practices this year.
T-bill rates were mixed. The discount rate on three-month Treasury bills auctioned yesterday fell to 3.44 percent from 3.495 percent last week. Rates on six-month bills rose to 3.745 percent from 3.715 percent. The actual return to investors is 3.518 percent for three-month bills, with a $10,000 bill selling for $9,913.04, and 3.87 percent for a six-month bill selling for $9,810.67. Separately, the Federal Reserve said the average yield for one-year Treasury bills, a popular index for making changes in adjustable-rate mortgages, rose to 3.88 percent last week from 3.82 percent the previous week.
Compiled from staff and news service reports.