General Motors Preferred Convertible Stock
Parent Company GM
Holders of Series B preferred stock, receive cumulative dividends at the rate per annum of 4.75% on the liquidation preference of $50 per share. These dividends are payable in cash, and/or shares of our common stock (subject to certain restrictions). Dividends on the Series B preferred stock will be payable quarterly on March 1, June 1, September 1, and December 1 of each year to and including the mandatory conversion date, commencing December 31, 2013.
This issue will be mandatorily convert to 1.2626 shares of common stock if the common is at or above $39.60. If the common
is at or below $33.00 the conversion rate will be 1.5152. Between the two common prices, holders will receive $50.00 worth of common.
This 87 million-share issue, part of the emergence package of General Motors (NYSE:GM) from bankruptcy, offers investors an opportunity
to earn a reasonable return while waiting for the common stock to move up. The federal government still owns
over 30% of GM. This security is for high-risk investors.
The more letters the better; a BBB/Baa is better than a BB/Ba, which is better than a B. Income securities rated BBB or higher are termed
“Investment Grade”. Those rated BB or below are termed “Below Investment Grade”. The term “Junk Bonds” typically refers to below
investment grade bonds and was a term created by the media.
$2.375 per year interest, Quarterly Payments. Qualifies for 15% tax rate on interest
Quantum - Free but you must register symbol of gm-b most others need gm-pb or gm.pb
While this may be higher risk then usual we like the odds.
- GM has already filed for bankruptcy and cant file for 7 years again
- It has many tax advantages now from that filing.
- The US government still owns part of the company
- Analysts all came out and upgraded GM recently