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GENERAL MOTORS COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
financial industry. In certain circumstances we adjust the valuation of debt for additional nonperformance risk or potential prepayment
probability scenarios. We may use a probability weighting of prepayment scenarios when the stated rate exceeds market rates and the
instrument contains prepayment features. The prepayment scenarios are adjusted to reflect the views of market participants. The fair
value measurements subject to additional adjustments for nonperformance risk or prepayment have been categorized in Level 3.
Secured Debt
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 products and generally do not require cash outflows to settle. Following GM Financial’s acquisition of the Ally Financial
international operations in April 2013, most of the wholesale financing balance classified as debt became intercompany debt and was
eliminated in consolidation, resulting in a decrease to our automotive debt balance of $682 million.
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. 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 $625 million at December 31, 2013.
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.
Our obligations under the secured revolving credit facilities are guaranteed by certain of our domestic subsidiaries and by a
substantial portion of our domestic assets including accounts receivable, inventory, property, plant and equipment, intellectual
property and trademarks, equity interests in certain of our direct domestic subsidiaries as well as up to 65% of the voting equity
interests in certain of our direct foreign subsidiaries, in each case, subject to certain exceptions. The collateral securing the secured
revolving credit facilities does not include, among other assets, cash, cash equivalents and marketable securities as well as our
investments in GM Financial, GM Korea and in our China JVs. If we receive and maintain an investment grade corporate rating from
two or more of the following credit rating agencies: Fitch Ratings, Moody’s Investor Service and Standard & Poor’s, we will no
longer have to post collateral or provide guarantees from certain domestic subsidiaries under the terms of the facilities.
The secured revolving credit facilities contain representations, warranties and covenants customary of these types of facilities,
including negative covenants restricting incurring liens, consummating mergers or sales of assets and incurring secured indebtedness,
and restricting us from making restricted payments, in each case, subject to exceptions and limitations. These restricted payments
include limitations on the amount of dividend payments and repurchases of our common stock. These restrictions can be mitigated
based on various factors including but not limited to cash flows generated from operating and investing activities, prior restricted
payments, our borrowing base coverage ratio, consolidated global liquidity and other provisions. The facilities also require us to
maintain at least $4.0 billion in consolidated global liquidity and at least $2.0 billion in consolidated U.S. liquidity.
Interest rates on obligations under the secured revolving credit facilities are based on prevailing per annum interest rates for
Eurodollar loans or an alternative base rate plus an applicable margin, in each case, based upon the credit rating assigned to the
secured revolving credit facilities or our corporate rating depending on certain criteria.
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2013 ANNUAL REPORT