General Motors Co. said Wednesday it agreed to a $6 billion, 364-day revolving credit agreement with 21 banks led by JPMorgan Chase & Co. as administrative agent and Citigroup Inc.’s Citibank N.A. unit as syndication agent.
The facility requires that GM
GM,
maintain at least $4 billion in global liquidity and at least $2 billion in U.S. liquidity. The debt raise comes as the United Auto Workers strike reaches the three-week mark this week, with no end in sight.
The UAW has broken with a longstanding tradition of striking at one carmaker at a time, and is asking members to strike at GM, Ford Motor Co.
F,
and Stellantis NV
STLA,
Some 25,000 autoworkers are on strike, and thousands more laid off as a cascading effect.
The UAW started the strike at GM, Ford and Stellantis assembly plants, moved to auto-parts distribution centers, sparing Ford, and last Friday the strike moved to more plants, but did not expand at Stellantis.
In both Ford and Stellantis cases, the union said it had made progress in the negotiations with the companies. For GM, however, the strike has expanded at each week. GM in 2019 faced a UAW strike that lasted nearly six weeks.
The company earlier this week reported third-quarter vehicle sales that rose 21%, showing resilience against rising interest rates and little impact yet from the strike.
GM’s stock fell 0.3% Wednesday, and some of its bonds sold off early in the day before buyers emerged, as the following chart from data solutions provider BondCliQ Media Services shows.
General Motors net customer flows (intraday). Source: BondCliQ Media Services
As the next chart shows, GM has a lot of debt coming due in the next few years, including $12 billion in 2023 alone.
Outstanding General Motors Debt (USD) by maturity year (Total $67.1 billion). Source: BondCliQ Media Services
GM shares have lost 7% so far this year, contrasting with gains of around 10% for the S&P 500 index.
SPX
This post was originally published on Market Watch
