General Motors Offers Senior Unsecured Notes

Rhea-AI Summary

General Motors (NYSE: GM) has announced a new offering of senior unsecured fixed rate notes. The proceeds will serve two main purposes: refinancing part of its $1.25 billion outstanding 6.125% senior notes due October 2025, and funding a portion of a $1.8 billion five-year term loan to Ultium Cells LLC, its joint venture with LG Energy Solution. The loan to Ultium Cells will enable the full voluntary prepayment of loans received under the U.S. Department of Energy's Advanced Technology Vehicles Manufacturing program. GM has filed the necessary registration statement and documentation with the SEC, with Citigroup Global Markets, Goldman Sachs, and Wells Fargo Securities serving as joint book-running managers for the offering.

Positive

• Strategic refinancing of existing debt with potentially better terms
• Supporting Ultium Cells LLC joint venture's growth in EV battery production
• Demonstrates ability to access debt markets for corporate financing needs

Negative

• Increases overall debt burden
• Additional interest expenses will impact cash flow
• Exposure to interest rate risk with new debt issuance

Insights

Corporate Finance Expert

GM raising new debt to refinance existing notes and fund a loan to its battery joint venture, showing typical liability management.

General Motors' announcement of a senior unsecured fixed rate notes offering represents standard corporate liability management with two clear objectives. First, they're refinancing a portion of $1.25 billion in 6.125% senior notes that mature in October 2025. This proactive refinancing, coming about five months before maturity, follows typical corporate treasury practices to address upcoming debt obligations before they come due.

More strategically interesting is GM's decision to fund a $1.8 billion five-year term loan to Ultium Cells LLC, their battery joint venture with LG Energy Solution. This loan will enable Ultium to fully prepay existing loans from the Department of Energy's Advanced Technology Vehicles Manufacturing program. This structured approach - GM borrowing to then lend to the JV - suggests the company sees advantages in replacing government financing with private funding, potentially reducing regulatory requirements or gaining more financial flexibility in the JV's operations.

The use of unsecured notes (not backed by specific collateral) indicates that debt markets remain accessible to GM despite higher interest rate environments. While the release doesn't specify the offering size or interest rate terms, this financing approach aligns with typical capital structure management for large industrial companies looking to optimize their debt profile while supporting strategic ventures.

Automotive Industry Strategist

GM's financing move strengthens its battery joint venture by replacing government loans with private capital, reinforcing EV commitment.

This debt issuance highlights GM's continued commitment to its electrification strategy through financial restructuring of Ultium Cells LLC, the critical battery joint venture with LG Energy Solution that underpins its EV ambitions. The decision to provide a $1.8 billion term loan to Ultium specifically to prepay government loans from the DOE's Advanced Technology Vehicles Manufacturing program represents a significant financial vote of confidence in this core technology partnership.

By replacing government funding with private capital, GM and LG are likely seeking greater operational agility for their battery production ventures. Ultium's cell technology is the foundation for GM's Ultium Platform that powers vehicles across multiple brands including the GMC Hummer EV, Cadillac LYRIQ, and upcoming Chevrolet models.

The timing is notable as battery production scaling remains one of the automotive industry's critical bottlenecks in EV adoption. By restructuring Ultium's financing, GM appears to be strengthening the financial foundation of this joint venture during a period when battery manufacturing capability represents a crucial competitive advantage. This financial move aligns with GM's publicly stated commitment to EV transition while demonstrating pragmatic financial management of the significant investments required for battery technology development and production capacity.

DETROIT, May 5, 2025 /PRNewswire/ -- General Motors (NYSE: GM) announced today it has launched an offering of senior unsecured fixed rate notes. GM intends to use the net proceeds from the sale of the notes for general corporate purposes, including to refinance a portion of the $1.25 billion outstanding of its 6.125% senior notes maturing on October 1, 2025, and fund a portion of the $1.8 billion five-year term loan it has agreed to make to Ultium Cells LLC, its joint venture with LG Energy Solution, to facilitate full voluntary prepayment of loans Ultium Cells LLC received under the U.S. Department of Energy's Advanced Technology Vehicles Manufacturing program.

Additionally, GM has filed a registration statement, including a prospectus and preliminary prospectus supplement, with the Securities and Exchange Commission (SEC) for this offering. Prospective investors should read the prospectus in that registration statement, the preliminary prospectus supplement, and other documents GM has filed with the SEC for more complete information about GM and this offering.

The documents are publicly available free of charge by visiting EDGAR on the SEC website at sec.gov. Alternatively, copies of the preliminary prospectus supplement and the accompanying prospectus may be obtained by contacting the joint book-running managers:

Citigroup Global Markets Inc. 
c/o Broadridge Financial Solutions, 1155 Long Island Avenue, Edgewood, New York 11717 or by telephone at 1-800-831-9146 or email at prospectus@citi.com

Goldman Sachs & Co. LLC
Attention: Prospectus Department, 200 West Street, New York, New York 10282, telephone: 1-866-471-2526, facsimile: 212-902-9316 or by emailing prospectus-ny@ny.email.gs.com

Wells Fargo Securities, LLC
608 2nd Avenue South, Suite 1000, Minneapolis, Minnesota 55402, Attention: WFS Customer Service, Telephone: +1-800-645-3751, Email: wfscustomerservice@wellsfargo.com

This press release shall not constitute an offer to sell or a solicitation of an offer to buy, nor shall there be any sale of these securities, in any state or jurisdiction in which such an offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state or jurisdiction. Any offer or sale of these securities will be made only by means of a prospectus, including a prospectus supplement, forming a part of the related registration statement.

General Motors (NYSE:GM) is driving the future of transportation, leveraging advanced technology to build safer, smarter, and lower emission cars, trucks, and SUVs. GM's Buick, Cadillac, Chevrolet, and GMC brands offer a broad portfolio of innovative gasoline-powered vehicles and the industry's widest range of EVs, as we move to an all-electric future. 

Cautionary Note on Forward-Looking Statements: This press release and related comments by management, may include "forward-looking statements" within the meaning of the U.S. federal securities laws. Forward-looking statements are any statements other than statements of historical fact. Forward-looking statements represent our current judgment about possible future events and are often identified by words like "aim," "anticipate," "appears," "approximately," "believe," "continue," "could," "designed," "effect," "estimate," "evaluate," "expect," "forecast," "goal," "initiative," "intend," "may," "objective," "outlook," "plan," "potential," "priorities," "project," "pursue," "seek," "should," "target," "when," "will," "would," or the negative of any of those words or similar expressions. 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For a further discussion of these and other risks and uncertainties, refer to our Annual Report on Form 10-K for the year ended December 31, 2024 and our Quarterly Report on Form 10-Q for the quarter ended March 31, 2025, as updated by our subsequent filings with the SEC. We caution readers not to place undue reliance on forward-looking statements. Forward-looking statements speak only as of the date they are made, and we undertake no obligation to update publicly or otherwise revise any forward-looking statements, whether as a result of new information, future events or other factors, except where we are expressly required to do so by law.

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SOURCE General Motors

FAQ

What is the purpose of GM's new senior unsecured notes offering?

GM will use the proceeds to refinance part of its $1.25 billion outstanding senior notes maturing in October 2025 and fund a portion of a $1.8 billion loan to Ultium Cells LLC, its joint venture with LG Energy Solution.

How much debt is GM refinancing with this new offering?

GM is refinancing a portion of $1.25 billion in outstanding 6.125% senior notes that mature on October 1, 2025.

Who are the book-running managers for GM's note offering?

The joint book-running managers are Citigroup Global Markets, Goldman Sachs & Co. LLC, and Wells Fargo Securities.

What is the purpose of GM's $1.8 billion loan to Ultium Cells LLC?

The loan will enable Ultium Cells LLC to fully prepay loans it received under the U.S. Department of Energy's Advanced Technology Vehicles Manufacturing program.

How can investors access information about GM's note offering?

Investors can access information through the SEC website at sec.gov or by contacting the joint book-running managers directly.