General Motors 2012 Annual Report Download - page 120

GENERAL MOTORS COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
The following table summarizes our short-term and long-term debt by collateral type (dollars in millions):
December 31, 2012 December 31, 2011
Unsecured debt ................................................................. $2,952 $3,065
Secured debt (a) ................................................................. 1,182 1,238
Capital leases ................................................................... 1,038 992
Total automotive debt ............................................................ $5,172 $5,295
(a) Includes wholesale financing of dealer inventory.
Wholesale Financing
Wholesale financing represents arrangements, primarily with Ally Financial, where cash is received in advance of the final sale of
vehicles, parts and accessories to our dealers or ultimate consumer. These obligations typically settle through the sale and delivery of
our product and generally do not require cash outflows to settle. Balances under these facilities fluctuate period to period based on the
volume of vehicles financed.
HCT Notes
As part of the establishment of the HCT to provide retiree healthcare benefits to certain active and retired employees in Canada, we
issued notes to the HCT with a fair value of $1.1 billion in October 2011. We recorded a premium of $42 million at issuance. The
notes accrue interest at an annual rate of 7.0%. The notes are due in periodic installments through 2018. We may prepay these notes at
any time. Refer to Note 18 for additional information on the HCT settlement.
GM Korea Preferred Shares
GM Korea has outstanding non-convertible mandatorily redeemable preferred shares. Dividends accrued at a rate of 2.5% through
October 2012 at which time the rate increased to 7.0% and remains in effect through 2017. The mandatorily redeemable preferred
shares are redeemable in periodic installments through 2017. In February 2011 we provided a guarantee to repurchase the mandatorily
redeemable preferred shares according to the redemption schedule if GM Korea does not have sufficient legally distributable earnings.
In December 2012 GM Korea made a payment of $671 million to redeem early a portion of shares that had a carrying amount of
$429 million and the difference was recorded as a loss on extinguishment of debt. GM Korea has the option to redeem the remainder
of the shares early provided sufficient legally distributable earnings exist.
Secured Revolving Credit Facilities
In November 2012 we entered into two new secured revolving credit facilities with an aggregate borrowing capacity of
$11.0 billion. These facilities consist of a three-year, $5.5 billion facility and a five-year, $5.5 billion facility and replaced our
previous five-year, $5.0 billion secured revolving credit facility that we entered into in October 2010. Availability under the secured
revolving credit facilities is subject to borrowing base restrictions.
The three-year, $5.5 billion facility is available to GM Financial as well as certain wholly-owned domestic and international
subsidiaries. The facility includes various sub-limits including a GM Financial borrowing sub-limit of $4.0 billion, a multi-currency
borrowing sub-limit of $3.5 billion, a Brazilian Real borrowing sub-limit of approximately $485 million and a letter of credit sub-
facility limit of $1.5 billion. We had amounts in use under the letter of credit sub-facility of $207 million at December 31, 2012.
The five-year, $5.5 billion facility allows for borrowings in U.S. Dollars and other currencies and includes a letter of credit sub-
limit of $500 million. This facility is not available to GM Financial.
General Motors Company 2012 ANNUAL REPORT 117