The long-term issuer default rating and the senior unsecured debt rating of Residential Capital LLC have been downgraded from BB-plus to BB-minus by Fitch Ratings. In addition, Fitch downgraded ResCap's subordinated debt rating from BB-minus to B-minus. All the ratings, including the company's short-term IDR and short-term debt rating (both B) remain on Rating Watch Negative, Fitch said. "This action follows ResCap's extremely difficult 2007 and uncertain prospects for 2008," the rating agency said. "While ResCap has aggressively addressed near-term liquidity issues, the company's return to even a modicum of sustainable profitability in 2008 would be difficult if mortgage market dislocation continues."
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