Motors Co. (GM) has agreed to repurchase 120 million shares of
Series A preferred stock from the United Auto Workers
unions Retiree Medical Benefits Trust for about $3.2
billion, or $27 per share.
The trust holds 260
million shares of Series A preferred stock and Canada GEN
Investment Corp. holds 16 million shares.
The deal depends upon
the scheduled Sept. 30 closing of Detroit-based GMs
offering of senior notes in three tranches maturing in 2018,
2023 and 2043.
In response to the
buyback offer, New York-based ratings agency Moodys
Investors Service Inc. raised GMs corporate family rating
to Baa3 from Ba1, and assigned a Ba1 rating to the new offering
of senior notes.
"The upgrade to an
investment grade level reflects our expectation that GMs
competitive position and credit metrics will continue to
improve based on the strength of its new product introductions
in a healthy U.S. market, its solid position in the
increasingly important Chinese auto market and its focus on
maintaining a robust liquidity profile," Moodys said.
"GM has been on a
steadily improving operational and financial trajectory since
it emerged from bankruptcy," Moodys senior vice president
Bruce Clark said in a statement Sept. 23, adding the agency
supports "the disciplines the company has embraced."