GM Debt-Equity Swap Fails Before Bankruptcy Deadline

General Motors Corp. failed to get 90 percent of its bondholders to swap their claims for stock, pushing the largest U.S. automaker closer to bankruptcy.

The principal amount of notes tendered was “substantially less than the amount required by GM” and, as a result, “the exchange offers will not be consummated,” the company said today in a statement. GM faces a government-imposed June 1 deadline to restructure or file for bankruptcy.

GM, propped up by $19.4 billion in emergency U.S. loans, will file for bankruptcy protection after failing to get 90 percent of bondholders to swap their debt, Chief Executive Officer Fritz Henderson has said. The exchange offer was opposed by both institutional and individual investors, who said they’ve been treated worse than a union retiree-medical fund.

Read Full Article from Bloomberg

- Posted: 2009-05-27 10:04:28

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