Are GMAC bonds safe?
On One Hand: Limited ValueAs of May 2010, GMAC bonds do have a limited value because of bailout funds given to the company, and the bonds retaining some value when traded on the open markets–but still not even 100 percent of the original purchase price, much less the interest that will likely not be paid. However even if bankruptcy occurs, traditionally bond and debt holders are more likely to get at least partially reimbursed before stockholders, offering a thin silver lining to GMAC bond holders.On the Other: Dire StraitsAs of 2010, despite bailout funds and other efforts, GMAC is still recording large financial losses, and has ceased making interest payments. While there is always the possibility of recovery, GMAC bonds are already down to “junk bond” status, meaning in all likelihood investors will never make their original investment back.Bottom LineWhile there are some options for original investors in GMAC bonds to get a small portion of their original investment back, there is
