General Motors Co boosted its revolving credit facility to GM Financial from $600 million to $1 billion. The facility is subordinate to GMF’s senior unsecured and secured debt.
The agreement says GM will use its “commercially reasonable efforts” to ensure that GM Financial will continue to be designated as a subsidiary borrower on up to $4 billion of GM’s corporate revolving line of credit.
“GM Financial is a core component of GM’s business and this agreement will strengthen its capability to support GM’s strategy,” said GM President Dan Ammann.
Since being acquired by GM in 2010, GM Financial has grown its share of GM’s business, which now represents 75% of GM Financial’s consumer loan and lease originations.
“With the acquisition of the international business, the growth in our North America product portfolio and the diversity of our funding platform, we are well positioned to support GM as its captive auto finance company. The support agreement represents the next step in the evolution of GM Financial and further cements our position as GM’s captive,” said GM Financial President and CEO Dan Berce.
As GM Financial expands its product portfolio and grows its business, GM committed to provide funding to GM Financial if its earning assets leverage ratio rises above pre-determined thresholds.
