This Day On The Street
Continue to site right-arrow
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
TheStreet Open House

GM to Pay Down $11 Billion of Debt

Stocks in this article: GM

DETROIT ( TheStreet) -- Moving to pare debt by about $11 billion and to shore up liquidity, General Motors (symbol) said Thursday it will buy back all of the government's preferred stock and pay a note held by the UAW retiree medical benefits trust.

The company also announced a contribution of at least $6 billion to its pension plans as well as completion of a $5 billion, five-year revolving credit facility, which will likely "remain generally undrawn."

GM

GM said it will repurchase $2.1 billion in preferred stock purchased under the Troubled Asset Relief Program on completion of its IPO, expected in November. The U.S. Treasury has invested $49.5 billion in GM. Following the repurchase, it will have received $9.5 billion in repayment, interest and dividends, it said Thursday. Additionally the Treasury holds 61% of GM's common stock.

The automaker will repay $2.8 billion outstanding on a 9% secured note held by the union's retiree medical benefits trust following the IPO. Combined, the repayments "will bring down our leverage by $11 billion by reducing debt and improving our pension funding position," said CFO Chris Liddell in a prepared statement.

In an additional step, GM will terminate a plan entitling it to accelerated receipt of payments when its dealers borrow money to fund inventory purchases. The move will result in an estimated $2 billion increase to GM's accounts receivable balance.

-- Written by Ted Reed in Charlotte, N.C.

>to contact the writer of this article, click here: Ted Reed

Check Out Our Best Services for Investors

Action Alerts PLUS

Jim Cramer and Stephanie Link reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

Jim Cramer's protégé, David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
Try it NOW
Try it NOW
Try it NOW

Check Out Our Best Services for Investors

Dividend Stock Advisor

Jim Cramer's protégé, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
Try it NOW
Try it NOW
Try it NOW
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!

Markets

DOW 17,678.70 +6.10 0.03%
S&P 500 2,057.09 +5.27 0.26%
NASDAQ 4,771.7630 +13.8840 0.29%

Partners Compare Online Brokers

Free Reports

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs