Summary
General Motors Company (GM) announced on September 4, 2018, the launch of an offering for senior unsecured fixed and floating rate notes. The primary purpose of this offering is to raise capital for refinancing maturing debt, pre-funding mandatory contributions to its U.K. and Canada pension plans for the years 2019 through 2021, and for general corporate purposes. Specifically, approximately $0.6 billion of the proceeds are earmarked for pre-funding these non-U.S. pension contributions. This strategic move to pre-fund pension obligations is noted as not being reflected in GM's previously issued adjusted automotive free cash flow guidance for 2018, which had only accounted for 2018 mandatory pension contributions. However, GM emphasizes that the underlying cash generation of the business for 2018 remains unchanged. An investor presentation detailing this offering has been furnished as an exhibit to the filing.
Key Highlights
- 1GM is launching an offering of senior unsecured fixed and floating rate notes.
- 2Proceeds will be used to refinance maturing debt and pre-fund pension contributions.
- 3Approximately $0.6 billion of proceeds will be used to pre-fund mandatory non-U.S. pension contributions for 2019-2021.
- 4The pre-funding of pension contributions was not included in prior 2018 free cash flow guidance.
- 5GM states that underlying cash generation for 2018 remains unchanged.
- 6An investor presentation related to the offering is included as an exhibit.