General Motors this week had offered its first unsecured bond offer its return from bankruptcy. The move garnered both praise and a large order book as the market descended on the offer.
The total volume for the bond was at USD5.4 billion and is another clear step for the US carmaker's return to investment grade status. It won praise from analysts, being called a sound and savvy move to shore up its balance sheet.
The offer was further assisted by the red-hot clmate as September was the biggest month for the US market in high grade issuances. It was projected that GM was able to attract more than USD25 billion in orders. A third of those orders came from investors who exclusively traded in investment grade bonds.
The bonds were originally junk-rated at Ba1/BB+/BB+ trade and is now expected to reach high grade territory. The said bonds were split eqully between five-year, ten-year and thirty-year bonds.
The proceeds would be used to repurchase 120 millon Preferred Series A shares owned by the United Autoworkers healthcare trust amounting to USD3.2 billion. Another credit note would also be purchased, this time held by the Canadian Auto Workers Health Care Trust.
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