General Motors 2011 Annual Report Download - page 51

GENERAL MOTORS COMPANY AND SUBSIDIARIES
S&P: September 2011 — Upgraded corporate rating to BB+ from BB- and upgraded our secured revolving credit facility rating to
BBB from BB+. Outlook revised to stable from positive. February 2011 — Outlook revised to positive from stable.
We continue to pursue investment grade status by maintaining a balance sheet with minimal financial leverage and demonstrating
continued operating performance. Achieving investment grade status will provide us with greater financial flexibility, lower our cost
of borrowing and may release collateral from certain agreements including our secured revolving credit facility.
Series A Preferred Stock
Beginning December 31, 2014 we will be permitted to redeem, in whole or in part, the shares of Series A Preferred Stock
outstanding at a redemption price equal to $25.00 per share plus any accrued and unpaid dividends, subject to limited exceptions. Our
ability to redeem any portion of this $6.9 billion face amount in Series A Preferred Stock will depend upon our having sufficient
liquidity.
Automotive Financing
Liquidity Overview
GM Financial’s primary sources of cash are finance charge income, servicing fees, net distributions from securitization trusts,
borrowings under credit facilities, transfers of finance receivables to trusts in securitization transactions, collections and recoveries on
finance receivables and net proceeds from senior notes transactions. GM Financial’s primary uses of cash are purchases of finance
receivables and leased assets, repayment of credit facilities, securitization notes payable and other indebtedness, funding credit
enhancement requirements for securitization transactions and credit facilities and operating expenses.
GM Financial used cash of $5.0 billion for the purchase of finance receivables and $0.8 billion for the purchase of leased vehicles
in the year ended December 31, 2011. These purchases were funded initially utilizing cash and borrowings under credit facilities and
subsequently funded in securitization transactions. GM Financial received cash of $3.7 billion from collections and recoveries on
receivables in the year ended December 31, 2011.
GM Financial used cash of $0.9 billion for the purchase of finance receivables in the three months ended December 31, 2010.
These purchases were funded initially utilizing cash and borrowings under credit facilities and subsequently funded in securitization
transactions.
Available Liquidity
The following table summarizes GM Financial’s available liquidity (dollars in millions):
Successor
December 31, 2011 December 31, 2010
Cashandcashequivalents......................................................... $ 572 $195
Borrowing capacity on unpledged eligible receivables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 387 272
Borrowing capacity on unpledged eligible leased assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 294 —
Available liquidity ............................................................... $1,253 $467
Senior Notes
In June 2011 GM Financial issued 6.75% senior notes of $500 million which are due in June 2018 with interest payable
semiannually. In July 2011 proceeds of $71 million from this offering were used to redeem all of GM Financial’s outstanding 8.50%
senior notes due in 2015. The remaining proceeds are to be used for general corporate purposes.
General Motors Company 2011 Annual Report 49