Bloomberg News

GM to Sell Bonds After Moody’s Lifts Automaker to High Grade (1)

September 23, 2013

General Motors Co. (GM:US) plans to sell bonds in a three-part offering that will help the carmaker partially owned by the U.S. government repurchase $3.2 billion of preferred stock. Moody’s Investors Service lifted GM to investment grade.

GM intends to issue five-, 10- and 30-year securities to help it buy back 120 million preferred shares from the United Auto Workers retiree health care trust, the Detroit-based company said today in a statement. The bond sale may price tomorrow, according to a person with knowledge of the transaction who asked not to be named because terms aren’t set. The new bonds will be rated Ba1, Moody’s said in a report.

The deal would come almost three years after the automaker that went bankrupt in 2009 repurchased $2.1 billion of the preferred stock from the Treasury Department. The UAW trust currently holds 260 million of the shares, GM said in the statement.

Moody’s raised the corporate rating of GM to Baa3 from Ba1, citing expectations for an improved credit profile and competitive position, according to the report today.

The $750 million of 4.25 percent notes issued by GM’s finance unit and maturing May 2023 were valued at 92.5 cents on the dollar to yield 5.25 percent last week, according to prices compiled by Bloomberg. Those securities are ranked Ba3 at Moody’s, two levels below the new notes, and BB- by Standard & Poor’s.

S&P has a BB+ rating on GM, with a “positive” outlook.

Ford Motor Co. was returned to investment-grade status by Moody’s in May 2012 and earlier this month by S&P.

To contact the reporter on this story: Charles Mead in New York at

To contact the editor responsible for this story: Alan Goldstein at

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