S&P assigns BBB to GM notes

S&P said it assigned its BBB issue-level rating to General Motors Co.'s proposed unsecured notes.

“We expect the company to use the net proceeds from the sale of the notes to refinance the October 2018 maturing debt (3.5%, $1.5 billion senior unsecured notes), pre-fund certain mandatory contributions for its U.K. and Canada pension plans (approximately $600 million) due in 2019 through 2021, and for other general corporate purposes,” S&P said in a news release.

“We expect the transaction to be roughly neutral for GM's credit metrics and its operating performance should support a ratio of free cash flow-to-debt of at least 15%-25% over the next two years.”

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