Insights

GM Bondholders get a sweetened New Deal

General Motors (NYSE: GM) Bondholders issued a statement of acceptance of a sweetened offer which involves issuing warrants to the bondholders such that more participation in upside movements of GM stock is involved.

Also important to the bondholders was that the money the U.S. Government was putting in would be in the form of common stock and thus not as senior debt.  If the government money had come in as senior debt it would have left the bondholders shifted from senior debtholders themselves into equity while new money coming in was superior to theirs.

This acceptance has caused the stock to trade higher on speculation the current common stock may not be wiped out as well as causing GM debt to trade up.

This seems to have been enough and now one less roadblock to a fast turnaround bankruptcy for GM is likely.