GM Financial to Raise Capital Through Investor Notes Program
General Motors Financial Co. launched a program to raise money through medium-term investor notes, the captive announced on Friday.
Investor notes are used to raise capital at companies, in this case, through retail investors in exchange for the interest gained on the loan. Investors are essentially making a bet on the company and its ability to pay back debts over time.
The program is called GM Financial Term Notes, and the notes will be issued at “par-value” with maturities ranging from nine months to 30 years at a minimum investment of $1,000, according to a company press release. Specific interest rates were not disclosed, but GM Financial Term Notes will offer “competitive market-based rates.”
The captive has performed well in recent quarters, including a 62% rise in retail loan originations year over year in the second quarter on the heels of an 87% increase in the first quarter.
Notes will begin to be offered “on a periodic basis,” starting sometime in the third quarter, which is already underway.
