General Motors 2014 Annual Report Download - page 97

GENERAL MOTORS COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
plus a spread based on our senior unsecured notes that is intended to represent our nonperformance risk. We obtain the benchmark yield
curves and yields on unsecured notes from independent sources that are widely used in the financial industry.
Revolving Credit Facilities
We received an investment grade corporate rating from Moody’s in September 2013 and from S&P in September 2014 which
allowed the release of the collateral securing our $11.0 billion revolving credit facilities under their terms.
In October 2014 we amended our two primary revolving credit facilities, increasing our aggregate borrowing capacity from $11.0
billion to $12.5 billion. These facilities consist of a three-year, $5.0 billion facility and a five-year, $7.5 billion facility. Both facilities
are available to the Company as well as certain wholly-owned subsidiaries, including GM Financial. The three-year, $5.0 billion
facility allows for borrowings in U.S. Dollars and other currencies and includes a GM Financial borrowing sub-limit of $2.0 billion, a
letter of credit sub-facility of $1.6 billion and a Brazilian Real sub-facility of $305 million. The five-year, $7.5 billion facility allows
for borrowings in U.S. Dollars and other currencies and includes a GM Financial borrowing sub-limit of $2.0 billion, a letter of credit
sub-limit of $500 million and a Brazilian Real sub-facility of $195 million.
The revolving credit facilities contain representations, warranties and covenants that are typical for these types of facilities. The
facilities also require us to maintain at least $4.0 billion in global liquidity and at least $2.0 billion in U.S. liquidity and to guarantee
any borrowings by our subsidiaries. If we fail to maintain an investment grade corporate rating from two or more of the following
credit rating agencies: Fitch, Moody’s and S&P, we will be required to provide guarantees from certain domestic subsidiaries under
the terms of the facilities. Interest rates on obligations under the revolving credit facilities are based on prevailing annual interest rates
for Eurodollar loans or an alternative base rate, plus an applicable margin.
Senior Unsecured Notes
In November 2014 we issued $2.5 billion in aggregate principal amount of senior unsecured notes comprising $500 million of 4.0%
notes due in 2025, $750 million of 5.0% notes due in 2035 and $1.25 billion of 5.2% notes due in 2045. In September 2013 we issued
$4.5 billion in aggregate principal amount of senior unsecured notes comprising $1.5 billion of 3.5% notes due in 2018, $1.5 billion of
4.875% notes due in 2023 and $1.5 billion of 6.25% notes due in 2043. These notes contain terms and covenants customary of these
types of securities including limitations on the amount of certain secured debt we may issue.
Extinguishment of Debt
In the year ended December 31, 2014 we prepaid and retired debt obligations with a total carrying amount of $325 million and
recorded a net gain on extinguishment of debt of $202 million which primarily represented unsecured debt in Brazil. In the year ended
December 31, 2013 we prepaid and retired debt obligations with a total carrying amount of $1.8 billion and recorded a net loss on
extinguishment of debt of $212 million which primarily represented the unamortized debt discount on GM Korea mandatorily
redeemable preferred shares. In the year ended December 31, 2012 we prepaid and retired debt obligations with a total carrying
amount of $514 million and recorded a net loss on extinguishment of debt of $250 million which primarily represented the
unamortized debt discount on GM Korea mandatorily redeemable preferred shares.
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