8-KMaterial AgreementsFinancial EventsExhibits & Filings

General Motors Co 8-K Report, Material Agreement (Apr 7, 2021)

Filed April 7, 2021For Securities:GM

Summary

General Motors (GM) has announced updates to its revolving credit facilities through amendments and restatements. The company entered into a Fourth Amended and Restated 3-Year Revolving Credit Agreement for $4.3 billion and a Third Amended and Restated 364-Day Revolving Credit Agreement for $2.0 billion. Additionally, GM amended its existing 5-Year Revolving Credit Agreement, increasing its capacity by $0.7 billion to $11.2 billion and extending the maturity of a significant portion by three years. These credit facilities provide GM and certain subsidiaries with access to significant liquidity, with specific allocations for its financial arm, General Motors Financial Company, Inc. The terms include standard covenants related to financial performance, such as maintaining minimum liquidity levels, and are subject to interest rate adjustments based on GM's credit rating. These actions signal GM's proactive approach to managing its financial flexibility and ensuring access to capital.

Key Highlights

  • 1GM entered into a $4.3 billion 3-Year Revolving Credit Facility and a $2.0 billion 364-Day Revolving Credit Facility.
  • 2The 3-Year Facility matures on April 7, 2024, and the 364-Day Facility matures on April 6, 2022.
  • 3GM's 5-Year Revolving Credit Facility's total borrowing capacity was increased to $11.2 billion from $10.5 billion.
  • 4A $9.9 billion portion of the 5-Year Facility maturity was extended by three years to April 18, 2026.
  • 5The 364-Day Facility is exclusively allocated for General Motors Financial Company, Inc.
  • 6Facilities contain covenants requiring GM to maintain at least $4.0 billion in global liquidity and $2.0 billion in U.S. liquidity.
  • 7Interest rates are based on Eurodollar or alternative base rates, subject to an applicable margin tied to GM's credit rating.

Frequently Asked Questions

GM has entered into new credit facilities totaling $6.3 billion ($4.3 billion 3-Year and $2.0 billion 364-Day) and has increased the capacity of its 5-Year Facility by $0.7 billion, bringing its total to $11.2 billion. The combined facility amounts reflect GM's available borrowing capacity.

The interest rates on these credit facilities are based on prevailing market rates (Eurodollar or alternative base rate) plus an applicable margin. This margin is directly tied to GM's corporate credit rating, meaning a better credit rating would result in a lower margin and thus lower borrowing costs, while a downgrade would increase them.

Key covenants include maintaining a minimum of $4.0 billion in global liquidity and $2.0 billion in U.S. liquidity. Other standard covenants related to mergers, asset sales, and secured debt borrowings are also in place, subject to certain exceptions.

This allocation likely reflects the specific funding needs and operational structure of GM's financial services subsidiary. By dedicating this shorter-term facility, GM can ensure its financial arm has access to necessary short-term liquidity for its operations, such as vehicle financing.