Home / International News / News detail

GM raises convertible bond offering to $1.3 bln

From Reuters | May 28 , 2007 10:48 BJT

General Motors Corp. (GM.N: Quote, Profile , Research) said on Thursday it had increased the size of its convertible bond offering to $1.3 billion from $1.1 billion after a favorable response from the market.

The net proceeds to GM from the issue will be about $1.2 billion, it said.

The offering comes just ahead of crucial labor talks with the United Auto Workers. GM may be able to use the proceeds for a strike fund, allowing it to survive at least a short strike, Lehman Brothers analyst Brian Johnson said. The current contract with the union expires in September.

The company also said it had priced the offering and granted the underwriters an over-allotment option to purchase up to $195 million aggregate principal amount of additional notes.

Interest on the notes will be paid semi-annually on June 1 and Dec. 1 at a rate of 1.50 percent per year, it said.

The notes will be convertible under certain conditions based on an initial conversion rate of about 0.68 shares of common stock per $25 principal amount of notes, which is equivalent to an initial conversion price of about $36.57 per share, the company said.

The initial conversion price represents a premium of about 20 percent over the stock's close of $30.47 on the New York Stock Exchange on Thursday, it said.

Gasgoo not only offers timely news and profound insight about China auto industry, but also help with business connection and expansion for suppliers and purchasers via multiple channels and methods. Buyer service:buyer-support@gasgoo.comSeller Service:seller-support@gasgoo.com

All Rights Reserved. Do not reproduce, copy and use the editorial content without permission. Contact us: autonews@gasgoo.com