General Motors Raises $2 Billion Through Senior Notes Sale

General Motors has closed a $2 billion senior notes sale, which will be used for general corporate purposes, including refinancing existing debt and funding a loan to Ultium Cells LLC. The company's financial performance is robust, but faces challenges in cash flow management. The stock's valuation is attractive with a low P/E ratio, but recent earnings call and corporate events reflect strategic growth in EVs and challenges from tariffs and cost pressures.

DETROIT, May 10, 2025 - General Motors (NYSE: GM) has successfully closed a $2 billion offering of senior unsecured fixed rate notes, the company announced today. The notes, which include $750.0 million of 5.350% notes due in 2028, $750.0 million of 5.625% notes due in 2030, and $500.0 million of 6.250% notes due in 2035, were priced at 5.350%, 5.625%, and 6.250% respectively [2].

The proceeds from the note sale will be used for general corporate purposes, including the refinancing of $1.25 billion of its 6.125% senior notes due October 1, 2025, and a portion of the $1.8 billion five-year term loan to Ultium Cells LLC, its joint venture with LG Energy Solution. This loan is intended to facilitate the full voluntary prepayment of loans received under the U.S. Department of Energy's Advanced Technology Vehicles Manufacturing program [1].

GM's financial performance remains robust, with a healthy overall health score and a strong free cash flow yield of 30%. Despite carrying total debt of $134.16 billion, the company's current ratio of 1.21 indicates a solid liquidity position [1].

The offering was led by Citigroup Global Markets Inc., Goldman Sachs & Co. LLC, and Wells Fargo Securities, LLC, acting as joint book-running managers. Investors are encouraged to review the registration statement, prospectus, and preliminary prospectus supplement, which are publicly available through the SEC's EDGAR system or directly from the joint book-running managers [2].

GM continues to focus on advancing technology to create safer, smarter, and lower emission vehicles. The company has reported strong financial results for the first quarter of 2025, surpassing analysts' expectations with an adjusted earnings per share (EPS) of $2.78 and revenue of $44.02 billion. However, the company faces challenges in cash flow management and the impact of tariffs on its 2025 profit forecast [1].

Mizuho Securities and UBS have recently revised their price targets for GM shares, reflecting the company's strategic growth in EVs and challenges from tariffs and cost pressures. Mizuho Securities lowered its price target to $53.00 from $55.00, while UBS reduced its target to $50.00 from $51.00 [1].

GM's recent announcements, including the reduction in shifts at its Oshawa Assembly plant in Canada and the increase in EV sales, reflect the company's ongoing efforts to mitigate the impact of tariffs and maintain strong profitability. The company expects an EPS of $8.25-$10 for 2025, with an EBIT adjusted guidance of $10-12.5 billion [1].

References:
[1] https://in.investing.com/news/company-news/general-motors-announces-senior-notes-offering-93CH-4808508
[2] https://investor.gm.com/news-releases/news-release-details/general-motors-prices-20-billion-senior-unsecured-notes