Fortresses Are All the Rage, from Rocky Humbert
Jamie Dimon on his last quarter earnings conference call said: "We maintained our fortress balance sheet, ending the second quarter with Tier 1 capital ratio of 10.1% JPM corporate debt rating: AA-/A"
Today's GM press release announcing a new labor contract read: "Importantly [the contract] preserves GM's fortress balance sheet."
GM corporate debt rating: B/BB-
If one only looks at the debt on the GM balance sheet, things look ok (about $10 Billion in LT Debt).
However this ignores the fact that GM has a $31 Billion (and growing) underfunded pension liability. Unlike most of the debt which was extinguished, this monster pension liability survived their bankruptcy reorganization.
Not all fortresses are created equal.