General Motors Financial Company, Inc. (GM Financial) has completed a significant public offering, issuing a total of $2.5 billion in senior notes, as detailed in a recent 8-K filing with the Securities and Exchange Commission. The offering, which closed today, involved the sale of three different series of notes, with varying interest rates and maturities.
The Fort Worth, Texas-based auto finance company, a subsidiary of General Motors Company (NYSE:GM), offered $300 million of floating rate senior notes due in 2030, $1.2 billion of 5.350% senior notes also maturing in 2030, and $1 billion of 5.900% senior notes due in 2035.
The floating rate notes will have an interest rate set quarterly based on the compounded secured overnight financing rate plus 1.290%, with the first interest payment due on April 7, 2025. The 2030 fixed-rate notes will pay interest semi-annually at 5.350%, and the 2035 notes will pay at a rate of 5.900% per annum, with both starting to pay on July 7, 2025.
The net proceeds from the sale, estimated at approximately $2.48 billion after underwriting discounts and offering expenses, are intended for general corporate purposes. The underwriting agreement was reached on January 2, 2025, with a syndicate of banks including Barclays (LON:BARC) Capital Inc., BBVA (BME:BBVA) Securities Inc., BofA Securities, Inc., J.P. Morgan Securities LLC, Santander (BME:SAN) US Capital Markets LLC, and Wells Fargo (NYSE:WFC) Securities, LLC.
The notes are unsecured senior obligations of GM Financial and will rank equally with the company's other senior unsecured debt. They are also effectively junior to any secured debt and to the liabilities of GM Financial's subsidiaries.
GM Financial's ability to sell significant assets or merge with other entities is limited by covenants in the indenture, which also restricts the company and certain subsidiaries from providing collateral for other debts unless the notes are equally and ratably secured.
The legal opinion related to the offering was provided by Latham & Watkins LLP and is included in the 8-K filing.
This news is based on a press release statement and reflects the latest financial maneuver by General Motors Financial Company, Inc. as it adjusts its corporate financing strategy.
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