It has $15.4 billion of bonds due this year. There is no issue about our ability to service our debt, Mr Devine said in an interview on Tuesday. Weve also gone to a number of other financing sources during the past couple of years. Weve relied less on the debt market.
Bond prices show investors are not as optimistic. The cost to insure $10 million of GM debt against default rose to a record of about $698,000, according to broker GFI Group in New York. GM bonds trade at yields that suggest investors place an 11.7% probability of default over the next year, according to Timothy Patrick, global head of investment-grade debt research at Banc of America Securities.
They have to stabilise market share and get health-care costs under control, said Mirko Mikelic, who oversees bonds at Fifth Third Asset Management in Grand Rapids, Michigan, including GM and Ford debt.