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Old 02-22-2009, 02:02 PM   #1
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Good News.... Bad News..

Senate Considering GM Debt Swap Support

Senate members are considering throwing the hammer down on GM debt holders.

One of the largest tasks at hand for General Motors and their restructuring is reducing their near $27 Billion in debt. The federal government is requiring GM to attempt to get their bond holders to do a debt-for-equity swap to reduce their debt to about $.30 on the dollar. On March 31 General Motors has to report to the Department of Treasury with a resolution to reducing their debt and thus far cooperation with the debt holders has been shaky. GMI has been told that there is consideration among the Senate of a bill that would put a squeeze on GM bond holders.

The majority of GM bonds is held by the largest banks in the U.S. One of which is JP Morgan. In an effort to nearly force the debt holders to agree to a debt-equity swap, the Senate is considering legislation that would require the bond holders to agree to swap or they would potentially lose their TARP funds. We're told part of the deal would also automatically reject said bond holders from receiving any further TARP funding if they were to deny swapping GM debt.

At this point this consideration is on the part of some of the Senate's "pro-GM" lawmakers and appears to be a grassroots effort. It's largely unclear is such legislation could pass in the Senate and whether the GOP would be supportive of it. It's also not entirely clear if President Obama would be willing to sign legislation forcing the banks to comply.

If GM fails to reduce their debt in compliance with the Department of Treasury's demands, they would likely lose their U.S. loans. If that were to happen, GM would be forced to file for Chapter 11 bankruptcy protection with little government support. Of which, the Administration no longer wishes to see due to the impact on jobs, however would the Administration support putting a gun to GM's bond holders? We shall see if anything comes of this. Stay tuned, something new on GM comes out almost every hour.

GMI has not been told of which Senators are considering this legislation.

http://www.gminsidenews.com/forums/f...support-75750/
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Old 02-22-2009, 03:05 PM   #2
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27B -> 810M...

Do it banks. Do eet.. Seriously, if they can eat that much debt there's hope for GM yet.
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Old 02-22-2009, 03:33 PM   #3
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sounds like a good plan......all the banks did with the TARP money was leave in the vault and pay bonuses.
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Old 02-22-2009, 03:46 PM   #4
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Now the government is running all of the biggest businesses. Just imagine how much longer until they raise taxes to 90% but give a huge tax discount to everyone that is willing to accept government control.
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I'll go ahead and say it... how could GM let this happen? They have 5 years to develop the new Camaro and no force field to protect from uninsured drivers???? I'm buying a Honda.
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Old 02-22-2009, 06:05 PM   #5
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There must have been an asterisk at the bottom of their agreement to receive TARP funds that said other condition/rules to apply, even those we haven't thought of yet.

The government is acting like a dirty loan shark.
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