GM Seeking $500M Bond Investment or Sale-Leaseback of Detroit HQ
- Oct 14, 2008
Less than six months after it paid off its debt on its Detroit headquarters, struggling automaker General Motors is trying to refinance the Renaissance Center or arrange a sale-leaseback to raise about $500 million.GM officials recently appeared before the Detroit Police & Fire Retirement System Pension Fund board in an effort to get the board to agree to a $250 million collateralized revenue bond investment, according to a Detroit Free Press report. If that pension board agrees, GM would seek another $250 million from another city pension fund. But GM may have trouble getting the first pension board to invest. Several pension board trustees told news groups that they considered it too big of a risk.GM moved into the Renaissance Center, a seven-building complex in downtown Detroit in 1996. The automaker bought the complex for $75 million, and then borrowed $500 million against it for remodeling, according to a Detroit News story by Robert Snell. As reported May 9 by CPN, GM paid $626 million to take full control of the building.John Blanchard, GM’s executive director of worldwide real estate, could not be reached by press time, but has stated this week that if the deal with the pension funds could not worked out, the auto giant would consider selling the Renaissance Center and leasing back space. He said the company is committed to staying in Detroit. The proposed refinancing comes as GM is trying to raise $15 billion to provide cash flow through 2010, according to published reports.