General Motors 2012 Annual Report Download - page 124

GENERAL MOTORS COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
The following table summarizes securitization notes payable (dollars in millions):
December 31, 2012 December 31, 2011
Year of Transactions Maturity Dates (a)
Original
Note
Amounts
Original
Weighted-
Average
Interest Rates
Total
Receivables
Pledged
Note
Balance
Note
Balance
2006 .................... January 2014 $ 1,200 5.4% $ — $ — $ 63
2007 .................... October 2013 – March 2016 $1,000 - 1,500 5.2% - 5.5% — — 794
2008 .................... January 2015 – April 2015 $ 500 8.7% - 10.5% 147 24 171
2009 .................... January 2016 – July 2017 $ 227 - 725 2.7% - 7.5% 207 160 298
2010 .................... July 2017 – April 2018 $ 200 - 850 2.2% - 3.8% 1,230 1,095 1,756
2011 .................... July 2018 – March 2019 $ 800 - 1,000 2.4% - 2.9% 2,728 2,519 3,813
2012 .................... June 2019 – May 2020 $ 800 - 1,300 1.4% - 2.9% 5,590 5,215
$9,902 9,013 6,895
Purchase accounting premium ............................................................ 11 43
Total securitization notes payable ......................................................... $9,024 $6,938
(a) Maturity dates represent final legal maturity of securitization notes payable. Securitization notes payable are expected to be paid
based on amortization of the finance receivables pledged to the trusts.
At the time of securitization of finance receivables, GM Financial is required to pledge assets equal to a specified percentage of the
securitization pool to support the securitization transaction. The assets pledged consist of cash deposited to a restricted account and
additional receivables delivered to the trust, which create overcollateralization. The securitization transactions require the percentage
of assets pledged to support the transaction to increase until a specified level is attained. Excess cash flows generated by the trusts are
added to the restricted cash account or used to pay down outstanding debt in the trusts, creating overcollateralization until the targeted
percentage level of assets has been reached. Once the targeted percentage level of assets is reached and maintained, excess cash flows
generated by the trusts are released to GM Financial as distributions from trusts. As the balance of the securitization pool declines, the
amount of pledged assets needed to maintain the required percentage level is reduced. Assets in excess of the required percentage are
also released to GM Financial as distributions from trusts.
Senior Notes
In August 2012 GM Financial issued 4.75% senior notes of $1.0 billion which are due in August 2017 with interest payable
semiannually. GM Financial intends to use the net proceeds from this offering for general corporate purposes including, but not
limited to, acquisitions. The notes are guaranteed by GM Financial’s principal operating subsidiary.
In connection with the issuance of these senior notes, GM Financial entered into a registration rights agreement that requires GM
Financial to file a registration statement with the Securities and Exchange Commission (SEC) for an exchange offer with respect to
the 4.75% senior notes and the subsidiary guaranty. If the registration statement has not been declared effective by the SEC within
365 days from the original issuance of the senior notes or ceases to remain effective, GM Financial will be required to pay the 4.75%
senior note holders a maximum amount of $0.50 per week of additional interest per $1,000 of principal during the time the
registration statement is not effective, for a period of up to one year.
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 2012 ANNUAL REPORT 121