DETROIT — General Motors says it has received $11 billion in credit lines from 35 financial institutions in 14 countries, boosting its available cash and credit to more than $42 billion.
The company wouldn’t say specifically what it plans to do with the money, only that it’s a source of “backup liquidity” that may be used for “strategic initiatives.”
But analysts said it could be hoarding the cash to help pay for restructuring in its troubled European operations, buying an auto finance arm in Europe from Ally Financial, or to further fund its pension plans. GM also could buy back stock, specifically from the U.S. government.
The U.S. Treasury Department owns 26.5 percent of the company, which it got in exchange for a $49.5 billion bailout about four years ago.
GM said the new lines have more favorable terms than the old one and will allow the company to borrow in different currencies.
One of the New York debt-rating agencies quickly gave the GM credit lines an investment-grade rating on Monday. Standard & Poor’s gave the lines a “BBB rating.” GM said it expected the new credit lines to get investment-grade ratings from all three major ratings agencies.
But that doesn’t mean GM’s overall corporate credit rating changed from junk status. S&P’s corporate rating on GM remains at “BB+,” the highest junk rating.
GM’s new lines of credit include a three-year $5.5 billion facility and a five-year $5.5 billion line. They replace GM’s $5 billion credit line, which was to expire in 2015. GM also has $31.6 billion in cash and securities.
Chief Financial Officer Dan Ammann said the lines are a vote of confidence in the company’s financial strength.
Last week, GM announced a $1.48 billion third-quarter profit on strong North American earnings, big improvements in South America and strong earnings in international areas outside of China.