May 24 (Bloomberg) -- General Motors Corp. said U.S. regulators are reviewing the automaker's accounting for commodity and foreign-exchange contracts and said it expects $1 billion in added costs to bail out former auto-parts subsidiary Delphi Corp.

The U.S. Securities and Exchange Commission is seeking documents related to the accounting used in GM's latest annual report, the Detroit-based company said in a regulatory filing today. Separately, GM said it may also have to restate some results after the SEC reviews accounting at the former General Motors Acceptance Corp. finance unit.

``I wish they were able to put the accounting issue behind them,'' said Pete Hastings, a fixed-income analyst at Morgan Keegan & Co. in Memphis, Tennessee. ``The thing that's more troubling is that they're raising the costs to bail out Delphi.''

The SEC request extends GM's two-year struggle to clean up its accounting and end restatements. Last year, the carmaker revised financial figures dating back to 2000 and overhauled its controller's office to improve oversight.

GM in March delayed its 2006 annual report to restate financial figures from 2002 to 2005. The SEC inquiry relates to the accounting in that report.

The company wasn't surprised by the move because GM has restated results related to the issues and the SEC is now seeking clarification, GM spokeswoman Melisa Tezanos said

Shares of GM dropped 96 cents, or 3.1 percent, to $30.47 at 4:01 p.m. in New York Stock Exchange composite trading. The perceived risk of owning GM's bonds fell.

Delphi

GM also said it expects costs related to the bailout of Delphi to be modified by the withdrawal of Cerberus Capital Management LP, which had been the lead private-equity firm behind a planned $3.4 billion investment.

As part of those changes, GM now expects to pay $500 million when Troy, Michigan-based Delphi emerges from bankruptcy. GM will also provide annual labor-related payments of between $300 million and $400 million along with additional yearly payments of $100 million.

The automaker earlier this month estimated an ongoing range of $100 million to $200 million a year as part of a bailout of Delphi. GM spun off the parts-making unit in 1999.

Retirement costs of some former GM workers at Delphi may total $7 billion, up from an earlier estimated range of $6 billion to $7.5 billion, GM said in the filing. GM will take an additional pretax charge of $1 billion in the second quarter to reflect the new estimate, Tezanos said. GM had previously set aside $6 billion for those obligations.

Bolstering Cash

General Motors reiterated a plan disclosed yesterday to bolster cash by raising $5.2 billion with a convertible-bond sale and a new line of credit. Fitch Ratings cut GM's unsecured debt rating in response.

A new, $1.1 billion convertible bond will replace one the company paid off in March and the carmaker added a $4.1 billion line of credit, secured by GM's 49 percent stake in the GMAC LLC finance unit, to be used for general corporate purposes.

Lehman Brothers analyst Brian Johnson said GM may use the added cash as a strike fund to strengthen its position in bargaining this year with the United Auto Workers. Talks begin in July on a four-year contract that expires in September. The money may also help GM set up a union retiree health-care fund, he said.

`Opportunity'

``It was an opportunity to raise some cash at a low rate, nothing more than that,'' GM North American chief Troy Clarke in an interview late yesterday.

GM's 8.375 percent note due July 2033 rose 0.13 cent to 93.50 cents on the dollar today, according to Trace, the NASD's bond-price reporting system. The yield fell to 9 percent.

The automaker also said that its Indianapolis-based Allison Transmission unit, which is for sale, had 2006 revenue of about $2.2 billion and an operating profit of $338 million. The automaker said it disclosed the unit results because the sale is now ``probable.''

GM may be able to raise $3 billion or more with the sale of Allison, Johnson estimated.

GM sold 51 percent of its former wholly owned General Motors Acceptance Corp. auto loan, mortgage and insurance unit to a group led by Cerberus in November. In the first quarter, the automaker had to inject $1 billion back into GMAC to make up for subprime loan losses at GMAC's mortgage unit.

New Accounting Chief

In November, GM hired former Interpublic Group of Cos. and AT&T Inc. executive Nicholas Cyprus as controller and chief accounting officer. He replaced chief accounting officer Peter Bible and controller Paul Schmidt. Bible resigned in June, and Schmidt said he would retire pending a replacement after GM restated results for 2000 to 2005 and disclosed U.S. investigations of its finances.

The company disclosed in October 2005 that it had received subpoenas relating to supplier cost reductions and credits. Supplier credits are generally cash an auto-parts maker would pay to GM in exchange for future business or as an advance on future price cuts. GM now bans that practice.

In March 2006, the automaker said it had received a second round of subpoenas relating to accounting for the disposal of precious-metal inventory. Those investigations continue.

The same month, GM reduced net income for 2000 to 2004 by a total of $387 million because of accounting errors involving supplier credits, a 2001 lawsuit settlement, economic assumptions for benefit-plan changes and the precious-metals transaction.

In November 2005, GM restated its 2001 earnings and its second-quarter 2005 earnings to reflect deeper losses.

Credit-default swaps based on $10 million of GM's bonds dropped $3,200 to $399,300 according to London-based CMA Datavision. A decrease in the five-year contracts indicates improvement in the perception of credit quality; an increase suggests the opposite.

To contact the reporter on this story: Jeff Green in Southfield, Michigan, at jgreen16@bloomberg.net.

Last Updated: May 24, 2007 16:16 EDT