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GENERAL MOTORS COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
Automotive Financing — GM Financial
The following table summarizes the carrying amount and fair value of debt (dollars in millions):
December 31, 2013 December 31, 2012
Carrying
Amount
Fair
Value (a)
Carrying
Amount
Fair
Value (a)
Secured
Revolving credit facilities ............................................. $ 9,000 $ 8,995 $ 354 $ 354
Securitization notes payable (b) ........................................ 13,073 13,175 9,024 9,171
Total secured ....................................................... 22,073 22,170 9,378 9,525
Unsecured
Senior notes ........................................................ 4,000 4,106 1,500 1,620
Bank lines and other unsecured debt .................................... 2,973 2,972 — —
Total unsecured ..................................................... 6,973 7,078 1,500 1,620
Total GM Financial debt .............................................. $ 29,046 $ 29,248 $ 10,878 $ 11,145
(a) The fair value of debt includes $23.0 billion and $11.1 billion measured utilizing Level 2 inputs at December 31, 2013 and 2012 and $6.2 billion
measured utilizing Level 3 inputs at December 31, 2013. For revolving credit facilities with variable interest rates and maturities of one year or
less, the carrying amount is considered to be a reasonable estimate of fair value. The fair value of other secured debt and the unsecured debt is
based on quoted market prices, when available. If quoted market prices are not available, the market value is estimated by discounting future net
cash flows expected to be paid using current risk-adjusted rates.
(b) Includes a private securitization that GM Financial used observable and unobservable inputs to estimate fair value. Unobservable inputs are
related to the structuring of the debt into various classes, which is based on public securitizations issued during the same time frame. Observable
inputs are used by obtaining active prices based on the securitization debt issued during the same time frame. These observable inputs are then
used to create expected market prices (unobservable inputs), which are then applied to the debt classes in order to estimate fair value which
would approximate market value.
Secured
Revolving Credit Facilities
The revolving credit facilities have revolving periods ranging from one to three years. At the end of the revolving period, if the
facilities are not renewed, the debt will amortize over periods ranging up to six years. Most of the secured debt was issued by VIEs
and it is repayable only from proceeds related to the underlying pledged finance receivables and leases. Refer to Note 12 for
additional information relating to GM Financial’s involvement with VIEs. Weighted-average interest rates are both fixed and variable,
ranging from 0.9% to 15.9% at December 31, 2013.
GM Financial is required to hold certain funds in restricted cash accounts to provide additional collateral for borrowings under
certain secured credit facilities. Additionally, some of GM Financial’s secured credit facilities contain various covenants requiring
minimum financial ratios, asset quality and portfolio performance ratios (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 event of default occurs under these agreements the lenders could elect to declare all amounts
outstanding under these agreements to be immediately due and payable, enforce their interests against collateral pledged under these
agreements, restrict GM Financial’s ability to obtain additional borrowings under these agreements and/or remove GM Financial as
servicer. At December 31, 2013 GM Financial was in compliance with all covenants related to its credit facilities.
In the year ended December 31, 2013 GM Financial entered into two new credit facilities with a total borrowing capacity of $1.3
billion. At December 31, 2013 revolving credit facilities of $7.3 billion resulted from the acquisition of the Ally Financial
international operations.
90
2013 ANNUAL REPORT