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NEW YORK –
General Motors Corporation (NYSE: GM) today announced plans to offer approximately $1.1 billion in convertible debt securities. The notes will be unsecured and will mature on June 1, 2009. GM intends to grant the underwriters of the securities a 13-day option to purchase up to an additional $165 million in principal amount of the securities. The
purpose of the offering is to replace $1.1 billion in convertible securities put to the company in March of this year and to bolster liquidity at a time when the capital markets present an attractive opportunity to do so.
The
joint-book running managers for the offering are Citi, Deutsche Bank
Securities and Goldman, Sachs & Co. In connection with the
offering, GM expects to enter into capped call transactions with
affiliates of the underwriters of the securities. The capped call
transactions are intended to substantially increase the effective
conversion premium of the securities and reduce potential dilution to
GM common stock upon potential future conversion. The counterparties to
the capped call transactions have advised GM that they expect to enter
into various derivative and other hedging activity with respect to GM's
common stock, which could have the effect of increasing, or preventing
or offsetting a decline in, the price of GM’s common stock concurrently
with or following the pricing of the convertible debt securities.
In addition, GM has received commitment for a supplemental revolving
credit facility in an aggregate amount of approximately $4.1 billion.
The company anticipates that the facility will be secured by GM’s
common equity ownership of GMAC LLC and will mature 364 days after the
definitive agreement is signed. The credit line could be drawn upon for
general corporate purposes including working capital needs.
GM has filed a registration statement, including a prospectus, with the
SEC (Registration No. 333-108532) for the offering to which this
communication relates. Before you invest, you should read the
prospectus in that registration statement and other documents GM has
filed with the SEC for more complete information about GM and this
offering. You may get these documents for free by visiting EDGAR on the
SEC Web site at www.sec.gov or the Investor Relations section of GM's web site at www.gm.com.
Alternatively, GM, any underwriter or any dealer participating in the
offering will arrange to send you the prospectus if you request it by
calling Citigroup Global Markets Inc. at 1-800-831-9146, Deutsche Bank
Securities at 1-800-503-4611 or Goldman, Sachs & Co. at
1-866-471-2526.
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