July 2003
On course or rushing down a dead end?
You've got to take your hat off to General Motors. At the end of
last month the embattled US auto company raised about $47 billion.
The banks stumped up $29.5 billion in syndicated loans, bond market
investors handed over $13.5 billion, and a $4 billion convertible
bond accounted for the rest. Proceeds from the bonds and
convertibles were explicitly earmarked for sorting out GM's pension
fund liabilities.
That GM needed to do something is beyond question. That it managed
to raise so much so quickly must have soothed raw nerves at head
office. But the real news is that fund managers were so willing to
part with their clients' money.
Just eight months ago GM was nearly as much a pariah in the minds
of corporate bond investors as Ford. The two were huge
borrowers and a significant part of the bond...
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