NEW YORK (Reuters) -- General Motors Co. is preparing to finalize a $10 billion credit line that will beef up liquidity and refinance existing debt, sources told Thomson Reuters.
JP Morgan is leading the deal that has launched to 10 senior lenders. The 10 senior lenders are understood to be part of the company's existing bank group.
Calls to General Motors were not returned by press time. JP Morgan declined to comment.
The company is asking its lenders for at least $8 billion and as much as $10 billion, split between a $5 billion, five-year revolving line of credit and a $5 billion, three-year revolver, sources said. The final amounts have yet to be determined since discussions are said to be ongoing.
The company is currently in active dialogue with top bankers. At the top level, the company is asking lenders for commitments of $600 million apiece. The company expects to line up top-tier commitments this week. A second tier of commitments of $350 million will be offered to lenders during a second round of syndication to take place in the next three weeks.
The new lines of credit will refinance an existing facility of $5 billion, other debt and provide added liquidity.
General Motors entered its existing $5 billion, five-year facility in 2010, returning to the capital markets a year after it emerged from a bankruptcy. The company's executives have repeatedly emphasized the U.S. automaker's "fortress balance sheet," which at the end of the second quarter included almost $33 billion in cash and securities.
However, analysts and investors are focused on when and how GM will fix its money-losing European operations and how much that will cost, as well as how the automaker will further reduce its pension obligations beyond what it has already done.