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GM Adds $2 Bil to Financial Safety Net

Maker looks to keep liquidity above $30 billion.

by on May.31, 2016

General Motors expanded its credit revolver by $2 billion to $14.5 billion to ensure it has enough cash to operate normally in tough times.

General Motors has put in place a bigger safety net to protect the company in the event of hard times or a catastrophic market downturn that cripples new car sales.

GM set up an unsecured $14.5 billion revolving credit facility consisting of a $10.5 billion five-year facility and a $4 billion three-year facility. The facility amends and extends GM’s existing $12.5 billion revolving credit facility and 44-different financial institutions subscribed to the new credit facility, GM’s top finance officer said.

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“We believe this larger revolver, along with our $20 billion target cash, will provide appropriate liquidity to enable consistent investment in a downturn to generate strong results,” said Chuck Stevens, GM executive vice president and chief financial officer. (more…)