GM bonds signal value may top Ford on bailout

SOUTHFIELD, Michigan: General Motors Corp bond trading shows investors are betting its government-backed bankruptcy will create a company with a higher market value than Ford Motor Co, the only major US automaker to shun a federal rescue.

Bondholders will have a claim to about a 10 percent stake in a so-called "New GM", the government-controlled automaker that will buy the best assets of the old company. That implies a value after bankruptcy exceeding Ford's, according to a June 1 report by Rod Lache, a Deutsche Bank AG analyst.

Based on Wednesday's closing bond prices and Deutsche Bank's formula, GM's market value would be about $33.1 billion, underscoring how taxpayer support will prop up the restructured automaker once it leaves court protection. Dearborn, Michigan-based Ford's market value as of Wednesday was $19.9 billion.