General Motors 2010 Annual Report Download - page 194

GENERAL MOTORS COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
Technical Defaults and Covenant Violations
Several of our loan facilities require compliance with certain financial and operational covenants as well as regular reporting to
lenders, including providing certain subsidiary financial statements. Failure to meet certain of these requirements may result in a
covenant violation or an event of default depending on the terms of the agreement. An event of default may allow lenders to declare
amounts outstanding under these agreements immediately due and payable, to enforce their interests against collateral pledged under
these agreements or restrict our ability to obtain additional borrowings. No technical defaults or covenant violations existed at
December 31, 2010.
Automotive Financing
Credit Facilities
The following table summarizes details regarding terms and availability of GM Financial’s credit facilities at December 31, 2010
(in millions):
Facility
Amount
Advances
Outstanding
Finance
Receivables
Pledged
Restricted
Cash
Pledged (a)
Syndicated warehouse facility (b) ........................................... $1,300 $278 $409 $ 8
Medium-term note facility (c) .............................................. 490 539 95
Bank funding facilities (d) ................................................. 64 — —
$832 $948 $103
(a) These amounts do not include cash collected on finance receivables pledged of $28 million which is included in GM Financial
Restricted cash at December 31, 2010.
(b) In February 2011 GM Financial extended the maturity date of the syndicated warehouse facility to May 2012 and increased the
borrowing capacity to $2.0 billion from $1.3 billion.
(c) The revolving period under this facility has ended and the outstanding debt balance will be repaid over time based on the
amortization of the receivables pledged until October 2016 when any remaining amount outstanding will be due and payable.
(d) The revolving period under this facility has ended and the outstanding balance under the bank funding facilities are secured by
asset-backed securities of $65 million.
GM Financial’s credit facilities are administered by agents on behalf of institutionally managed commercial paper or medium-term
note conduits. Under these funding agreements, GM Financial transfers finance receivables to its special purpose financing trusts.
These subsidiaries, in turn, issue notes to the agents, collateralized by such finance receivables and cash. The agents provide funding
under the notes to the subsidiaries pursuant to an advance formula, and the subsidiaries forward the funds to GM Financial in
consideration for the transfer of finance receivables. These subsidiaries are separate legal entities and the finance receivables and
other assets held by these subsidiaries are legally owned by these subsidiaries and are not available to GM Financial’s creditors or
their other subsidiaries. Advances under the funding agreements bear interest at commercial paper, London Interbank Offered Rates
(LIBOR) or prime rates plus a credit spread and specified fees depending upon the source of funds provided by the agents.
Credit Facility Covenants
GM Financial is required to hold certain funds in restricted cash accounts to provide additional collateral for borrowings under
certain of its credit facilities. The credit facilities contain various covenants requiring minimum financial ratios, asset quality and
portfolio performance ratios including portfolio net loss and delinquency ratios, and pool level cumulative net loss ratios, as well as
limits on deferment levels. Failure to meet any of these covenants could result in an event of default under these agreements. If an
192 General Motors Company 2010 Annual Report