GM Increases GM Financial’s Credit Line
DETROIT — General Motors Co. today increased its financial support of General Motors Financial Co. (GM Financial), providing the captive finance company with a new $1 billion line of credit.
The new support agreement replaces an existing $600 million credit line. It also provides that GM will use commercially reasonable efforts to ensure that GM Financial will continue to be designated as a subsidiary borrower on up to $4 billion of GM’s corporate revolving line of credit.
“GM Financial is a core component of GM’s business and this agreement will strengthen its capability to support GM’s strategy,” said GM President Dan Ammann.
As of June 30, GM Financial had total available liquidity of $4.8 billion, consisting of $1.4 billion of unrestricted cash, $1.8 billion of borrowing captivity on unpledged eligible assets, $990 million of borrowing capacity on unsecured lines of credit and GM’s $600 million credit facility.
Since being acquired by GM in 2010, GM Financial has significantly increased its share of GM’s business, which now represents 75% of GM Financial’s consumer loan and lease originations. The new credit line comes at a time when the captive finance company is expanding its product offerings, including the rollout of a prime lending program to GM dealers during the second quarter, and operations into International markets.
“With the acquisition of the international business, the growth in our North America product portfolio and the diversity of our funding platform, we are well positioned to support GM as its captive auto finance company,” GM Financial President and CEO Dan Berce stated in a company press release. “The support agreement represents the next step in the evolution of GM Financial and further cements our position as GM’s captive.”
The support agreement has been filed by GM Financial on Form 8-K with the United States Securities and Exchange Commission.
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