DETROIT (AP) -- General Motors Corp. said Friday it intends to draw down $3.5 billion of a $4.5 billion secured revolving credit facility for its restructuring in what it called "uncertain times in the capital markets."
General Motors (GM, Fortune 500) will be using the remainder of the credit facility. The company said it was making the move to have more liquidity while capital markets are under pressure.
The automaker was reacting after a week that brought the bankruptcy of Lehman Brothers Holdings Inc. (LEH, Fortune 500), the sale of Merrill Lynch & Co. (MER, Fortune 500) to Bank of America Corp. (BAC, Fortune 500) and a government bailout of insurer American International Group Inc. (AIG, Fortune
500)General Motors also said in the news release it had completed a $322 million debt to equity exchange.
http://money.cnn.com/2008/09/19/news/companies/general_motors.ap/index.htm?postversion=2008091920
My Response: This article is a perfect example of how one company effects another. This was a lessened learn from GM through an indirect experience of Lehman. Although GM was not directly effected by the fall of Lehman, it caused them to think about what could happen to them in the near or far future. This was a smart move on GM's behalf.
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