GM bolsters liquidity with extended $3.6B credit line

Photographer: Sandy Huffaker/Bloomberg

General Motors has extended $3.6 billion under its three-year revolving credit line to April 2022, just one week after renewing its $2 billion, 364-day revolving credit facility for the “exclusive” use of its captive finance arm GM Financial, the automaker announced today.

While GMF does not currently “require support” from the credit line, a company spokeswoman told Auto Finance News, the facility provides an “additional and diversified source of liquidity to address the company’s working capital needs and for general corporate purposes,” she said.

GMF has about $24 billion of liquidity, according to a JP Morgan research note.

In addition to the extended line of credit, GM announced today it has suspended the quarterly cash dividend on its common stock, suspended its share repurchase program and has taken other significant austerity measures to preserve near-term available cash.

“We continue to enhance our liquidity to help navigate the uncertainties in the global market created by this pandemic,” said GM Chief Financial Officer Dhivya Suryadevara in a statement. “Fortifying our cash position and strengthening our balance sheet will position the company to create value for all our stakeholders through this cycle.”

GMF has a $78.7 billion portfolio, according to Big Wheels Auto Finance Data. Earlier this month, GM reported its sales declined 7% year over year as the OEM delivered 618,335 vehicles, according to its first-quarter 2020 figures. Halted production also contributed to a decline in inventory, which was down nearly 18% YoY.

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