Business
Statement re: GM Plans to Amend Credit Facility
Statement re: GM Plans to Amend Credit Facility.
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[{"type":"text","content":"\n \n General Motors Announces Plans to Amend its Credit Facility \n \n NEW YORK, June 20 -- General Motors Corp. (NYSE: GM) today announced its \nplan to amend and extend its existing $5.6 billion unsecured revolving credit \nfacility. Under the proposed terms, all existing lenders will receive a 20 \npercent reduction in their commitments, and have the opportunity to extend to \n2011 in return for collateral, pricing and other structural enhancements. \n The amendment to the credit facility must be approved by lenders with \ngreater than 50 percent of the loan commitment under the existing facility. \nGM has received formal indications that the majority of its lending bank \nsyndicate agreed to amend and extend. Lenders that do not consent will \nmaintain their commitment in the unsecured facility through 2008 and will not \nreceive collateral, pricing or other structural enhancements. \n The proposed amendment will remove any existing uncertainty as to whether \nthe bank syndicate will be required to honor a borrowing request. \n \"GM values its long-standing relationships with its banks and believes \nthat these proposed changes to the facility will be beneficial for all \nparties,\" said Walter Borst, GM treasurer. \"The amended facility will further \nstrengthen GM's strong liquidity profile and will reposition this source of \ncapital from a standby facility to one that will be drawn on from time to time \nto fund working capital and other needs.\" \n Under the amended facility, borrowings from the extending lenders will be \nlimited to an amount based on the value of the underlying collateral. \nCollateral will consist of certain North American accounts receivable and \ninventory of General Motors Corp., Saturn Corp. and GM of Canada Ltd.; certain \nplants, property and equipment of GM of Canada Ltd.; and a pledge of 65 \npercent of the stock of the holding company for GM's indirect subsidiary GM de \nMexico. All-in cost of borrowings from extending lenders will likely be in a \nrange of LIBOR (London InterBank Offered Rate) plus 200-225 basis points, \ndepending on final rating agency ratings. In addition, extending lenders will \nreceive a consent fee of 40 basis points. \n GM anticipates that the amendment and extension of the existing credit \nfacility will be completed by the end of July. Completing the transaction,...