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GM Said to Raise $2.5 Billion With Three-, Five, 10-Year Bonds

May 7 (Bloomberg) -- General Motors Co. raised $2.5 billion through its finance unit in a three-part bond offering, the automaker’s first issue in almost nine months.

The sale from General Motors Financial Co. consisted of $1 billion of three-year, 2.75 percent notes that yield 241 basis points more than similar-maturity Treasuries, and $750 million each of five-year, 3.25 percent debt at a spread of 250 basis points and 10-year, 4.25 percent securities at 247, according to person with knowledge of the transaction who asked not to be identified. The deal was initially marketed at $2 billion.

Proceeds will be used to help finance a portion of the company’s $4.2 billion purchase of Ally Financial Inc.’s operations in Europe and Latin America to repay an inter-company loan and to fund working capital, the Fort Worth, Texas-based unit said yesterday in a regulatory filing.

Ally, formerly known as GMAC Inc., was owned by GM until 2006, when the automaker sold 51 percent to Cerberus Capital Management LP. GMAC almost collapsed under the weight of bad subprime mortgages during the financial crisis.

GM Financial last issued new bonds on Aug. 13 with a $1 billion sale of 4.75 percent securities due 2017, according to data compiled by Bloomberg. A basis point is 0.01 percentage point.

To contact the reporter on this story: Alan Goldstein at agoldstein5@bloomberg.net

To contact the editor responsible for this story: Alan Goldstein at agoldstein5@bloomberg.net

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