GM ended Q1 with $33.4 billion in automotive liquidity. It wants more for GD V2.0.
In the latest defensive move as the COVID-19 Pandemic is leading global economies into Great Depression V2.0**, General Motors (NYSE: GM) announced today it has launched an offering of senior unsecured fixed rate notes. GM intends to use the net proceeds from the sale of the notes for general corporate purposes. Translation: the cash will be needed as profits continue to drop. (COVID Effects: GM Q1 Earnings Drop -89% to $0.17 a Share)
“We expect the New 364-Day Revolving Facility to be unsecured and to provide available borrowing capacity of approximately $2 billion in U.S. Dollars only, and we have received commitments from lenders in excess of this amount. We expect the New 364-Day Revolving Facility will be generally consistent with the terms of our existing revolving credit facilities,” GM said.
Late today GM subsequently said: the pricing of three series of senior unsecured notes totallledof $4.0 billion. These notes include $1.0 billion of 5.40 percent notes due in 2023, $2.0 billion of 6.125 percent notes due in 2025 and $1.0 billion of 6.80 percent notes due in 2027. The offering is expected to settle on Tuesday, May 12, 2020. In addition, following the closing of the notes offering, GM expects to enter into a new 364-Day Revolving Credit Agreement, subject to certain closing conditions. We expect the New 364-Day Revolving Facility to be unsecured and to provide available borrowing capacity of approximately 2 billion in U.S. dollars, and we have received commitments from lenders in excess of this amount.
Yesterday GM said its Q1 EPS-diluted was $0.17 and EPS-diluted-adjusted was $0.62. The COVID-19 impact on EBIT-adjusted was a loss of -$1.4 billion. GM ended quarter with $33.4 billion in automotive liquidity.
When GM suspended operations last March, it also moved to preserve liquidity. GM ended the quarter with a $33.4 billion in automotive liquidity, including an approximately $16 billion draw-down from its revolving credit facilities. In addition, the company extended $3.6 billion under its three-year revolving credit agreement, and GM and GM Financial renewed their 364-day $2 billion revolver.
GM early on 7 May filed a registration statement, including a prospectus and preliminary prospectus supplement, with the SEC for the new offering.
“All claims of creditors (including secured and unsecured creditors and general trade creditors) and preferred stockholders of GM subsidiaries will have priority with respect to the assets of such subsidiaries over our claims (and therefore the claims of our creditors, including holders of the Notes) as an equity holder of such subsidiaries. Consequently, the Notes will be structurally subordinated to the indebtedness and other liabilities of our subsidiaries and any subsidiaries that we may in the future acquire or create,” GM said.
The economy will experience a sharp contraction in the second quarter of 2020. In CBO’s current economic projections, inflation-adjusted gross domestic product (real GDP) declines by about 12 percent in that quarter, equivalent to a 40 percent annualized rate of decline. The unemployment rate averages close to 14 percent, and interest rates on 3-month Treasury bills and 10-year Treasury notes average near 0.1 percent and 0.6 percent, respectively.
If the laws governing federal spending and revenues generally remained unchanged, the federal budget deficit would be $3.7 trillion in fiscal year 2020, and federal debt held by the public would equal 101 percent of GDP by the end of the fiscal year, CBO projects.
General Motors to Offer More Senior Unsecured Notes
GM ended Q1 with $33.4 billion in automotive liquidity. It wants more for GD V2.0.
In the latest defensive move as the COVID-19 Pandemic is leading global economies into Great Depression V2.0**, General Motors (NYSE: GM) announced today it has launched an offering of senior unsecured fixed rate notes. GM intends to use the net proceeds from the sale of the notes for general corporate purposes. Translation: the cash will be needed as profits continue to drop. (COVID Effects: GM Q1 Earnings Drop -89% to $0.17 a Share)
“We expect the New 364-Day Revolving Facility to be unsecured and to provide available borrowing capacity of approximately $2 billion in U.S. Dollars only, and we have received commitments from lenders in excess of this amount. We expect the New 364-Day Revolving Facility will be generally consistent with the terms of our existing revolving credit facilities,” GM said.
Late today GM subsequently said: the pricing of three series of senior unsecured notes totallledof $4.0 billion. These notes include $1.0 billion of 5.40 percent notes due in 2023, $2.0 billion of 6.125 percent notes due in 2025 and $1.0 billion of 6.80 percent notes due in 2027. The offering is expected to settle on Tuesday, May 12, 2020. In addition, following the closing of the notes offering, GM expects to enter into a new 364-Day Revolving Credit Agreement, subject to certain closing conditions. We expect the New 364-Day Revolving Facility to be unsecured and to provide available borrowing capacity of approximately 2 billion in U.S. dollars, and we have received commitments from lenders in excess of this amount.
Yesterday GM said its Q1 EPS-diluted was $0.17 and EPS-diluted-adjusted was $0.62. The COVID-19 impact on EBIT-adjusted was a loss of -$1.4 billion. GM ended quarter with $33.4 billion in automotive liquidity.
When GM suspended operations last March, it also moved to preserve liquidity. GM ended the quarter with a $33.4 billion in automotive liquidity, including an approximately $16 billion draw-down from its revolving credit facilities. In addition, the company extended $3.6 billion under its three-year revolving credit agreement, and GM and GM Financial renewed their 364-day $2 billion revolver.
GM early on 7 May filed a registration statement, including a prospectus and preliminary prospectus supplement, with the SEC for the new offering.
“All claims of creditors (including secured and unsecured creditors and general trade creditors) and preferred stockholders of GM subsidiaries will have priority with respect to the assets of such subsidiaries over our claims (and therefore the claims of our creditors, including holders of the Notes) as an equity holder of such subsidiaries. Consequently, the Notes will be structurally subordinated to the indebtedness and other liabilities of our subsidiaries and any subsidiaries that we may in the future acquire or create,” GM said.
** CBO’s Current Projections of Output, Employment, and Interest Rates and a Preliminary Look at Federal Deficits for 2020 and 2021
The economy will experience a sharp contraction in the second quarter of 2020. In CBO’s current economic projections, inflation-adjusted gross domestic product (real GDP) declines by about 12 percent in that quarter, equivalent to a 40 percent annualized rate of decline. The unemployment rate averages close to 14 percent, and interest rates on 3-month Treasury bills and 10-year Treasury notes average near 0.1 percent and 0.6 percent, respectively.
If the laws governing federal spending and revenues generally remained unchanged, the federal budget deficit would be $3.7 trillion in fiscal year 2020, and federal debt held by the public would equal 101 percent of GDP by the end of the fiscal year, CBO projects.