Gary Watson

GM's Bond Restructing Plan

I suggest bondholders receive a 50% payout in cash funded by the federal government by buying pfd stock in GM @ a 4% return. The same for Veba. Issue a tender offer based on the above with the proviso that all parties agree prior to execution. I believe this will be the least expensive way to go!!!


On Dec 04 02:57 AM A US taxpayer wrote:

> Bankruptcy without Govt intervention is a good option for bondholder.
>
>
> Give away under-funded and poorly managed pension to PBGC, cancel
> Veba and strip out all assets and sell it off to foreign company,
> and I bet vulture funds make more than 25 bucks per bond. So there
> is a return potential. But all others are worse off;
>
> Shareholders get $0, of course.
> Workers do lose job next 2-3 years, and many lives will be ruined.
>
> Likely this will extend recession much longer.
> No bottom for Michigan housing.
> Very high political cost to democrats
>
> However, there is no upside for bondholders to give up their rights
> as lenders. If GM thinks the bond holders will take equal exchange
> with equity for 50%, they are sadly mistaken. No one believes that
> GM/F CHrysler is a going concern with or without Govt loans, not
> even UAW leader Gettelfinger, who avoded answering today whether
> UAW is willing to take GM equity for its member's 401 k. He sure
> made it sound like "we will take our free ride with govt money but
> are not willing/foolish enough to share the equity risk."
>
> If anything, bondholders are likely to ask US Govt to guarantee the
> debt, not exchange it for equity share. I can see new addition to
> Barclay's agency debt index.
>
> So you are looking at at least 16 billion more of the US Govt line
> of credit for GM/F/Chrysler, for total of what, 53 billion and more?
>
>
> Let's review that planned bankruptcy option again.