Government Motors Selling Bonds to Fund Subprime Car Loans
Bloomberg has the story (no link yet).
“General Motors Co. is planning its first unsecured bond sale since emerging from bankruptcy two years ago as it raises cash to increase lending to less creditworthy car buyers.”
GM’s Chief Financial Officer Dan Amman:
“We expect GM Financial to be active in subprime…”
Sounds familiar. Lovely. My guess is that credit is tight for all but the most creditworthy and that GM is still suffering from its stigma as Government Motors, so they are going after this niche, which is underserved coming out of the credit crisis. They’ve got no choice but to bottom feed.