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Mar 23, 2009 - Bonds, GM Bonds

These Bonds drove some pretty hot cars, although I'm pretty sure none of them were GM models.

Financial and legal advisors to GM bondholders wrote an open letter to the Treasury Secretary and other members of the auto task force raising their concerns about the restructuring.

"We are concerned that the company is putting too much faith in a near-term turnaround in the economy that would enable annual car and truck sales to reach previous levels," representatives of GM bondholders said in the letter.

GM's restructuring plan presented to U.S. officials on February 17 might not go far enough to keep it out of a court-supervised bankruptcy, the letter said.

Is that really their concern? Or is it the hit they're going to take on over $27 billion in bond debt held by investors who have been asked to surrender a claim on two-thirds of the principal in exchange for equity in a recapitalized company or another payout at near 33 cents on the dollar?

There's risk in all investments, even bonds. And sometimes that risk bites you. Funny how so many people think that life is supposed to be risk and pain free nowadays.

Read more at Reuters.com

4:35 am | Categories: automotive news, gm Permalink | Alert Administrator

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