American auto lender
General Motors Financial Company, Inc.
is the
financial services
arm of
General Motors
. The company is a global provider of auto finance, with operations in the
United States
,
Latin America
,
Canada
,
Europe
(which was sold to
PSA Groupe
and
BNP Paribas
following the sale of GM's core area businesses
Opel
and
Vauxhall
in a $2.2 billion deal), and
China
. The company is headquartered in
Fort Worth
,
Texas
, where it is downtown Fort Worth's largest employer.
[3]
Founded in 1992 as AmeriCredit Corp., the company was acquired by GM in October 2010 and renamed General Motors Financial Company, Inc. The company provides retail loan and
lease
programs through auto dealers for customers across the credit spectrum.
[4]
They also offer commercial lending products, such as
retail floorplan
,
construction
and real estate loans, or insurance for car
dealerships
.
Before its acquisition by GM, the company ranked at 768 on the
Fortune 1000
.
[5]
Acquisition by General Motors
[
edit
]
In July 2010, General Motors entered into a definitive agreement to acquire AmeriCredit in an all-cash transaction valued at approximately $3.5 billion. The deal provided GM with a new financial arm to replace the loss of
GMAC
(now
Ally Financial
) in 2006.
[6]
Following the approval of the deal by AmeriCredit shareholders, GM renamed the company "GM Financial" on October 1, 2010.
[7]
On September 4, 2014, GM and GM Financial announced it entered into a support agreement providing for leverage limits and liquidity support to GM Financial if needed, as well as other general terms of support. Under the terms of the agreement, as GM Financial expands its product portfolio and grows its business, GM committed to provide funding to GM Financial if its earning assets leverage ratio rises above pre-determined thresholds. GM extended an intercompany revolving credit facility to GM Financial to provide up to $1 billion of liquidity if needed. This facility, which is subordinate to GM Financial’s senior unsecured and secured debt, will replace an existing $600 million line of credit from GM. The agreement also provides that GM will use its commercially reasonable efforts to ensure that GM Financial will continue to be designated as a subsidiary borrower on up to $4 billion of GM’s corporate revolving line of credit.
[8]
Since being acquired by GM in 2010, GM Financial has significantly increased its share of GM’s business which now represents 75 percent of GM Financial’s consumer loan and lease originations.
[8]
On August 11, 2020,
Standard & Poor's
Ratings Services revised the
credit ratings
of both GM and GM Financial to stable from negative and affirmed the automaker's BBB issuer credit rating and issuer level ratings.
[9]
On June 18, 2015,
Fitch Ratings
upgraded the credit ratings of both GM and GM Financial with a stable outlook. The new GM corporate and GM Financial credit rating is BBB?.
[10]
International operations
[
edit
]
In April 2011, GM Financial acquired FinanciaLinx, one of the largest independent leasing companies in Canada, to expand product offerings into Canada.
[11]
FinanciaLinx operates as a
subsidiary
of GM Financial.
[
citation needed
]
In November 2012, GM Financial announced the acquisition of
Ally Financial
's international assets.
[12]
The transaction includes operations in
Austria
,
Belgium
,
Brazil
,
Chile
,
Colombia
,
France
,
Germany
,
Greece
,
Italy
,
Mexico
, the
Netherlands
,
Peru
,
Portugal
,
Spain
,
Sweden
,
Switzerland
and the
United Kingdom
. It also includes Ally’s 40-percent interest in its Chinese joint venture
GMAC
-
SAIC Motor
. The majority of those assets were closed in 2013, with the remaining portion, an equity interest in a joint venture in
China
, completed January 2, 2015.
[13]
In March 2017, the European arm of GM Financial was sold to
Groupe PSA
and
BNP Paribas
following the sale of GM's core area businesses
Opel
and
Vauxhall Motors
in a $2.2 billion deal.
Industrial loan charter
[
edit
]
In November 2020, it was reported that GM Financial has been in discussions with regulators about forming an
industrial loan company
(which allows ownership of both commercial firms and banks), which would allow it to expand its auto-finance business.
[14]
References
[
edit
]
- ^
a
b
c
d
"FY 2021 Earnings Release, General Motors Financial Company"
. GM Financial. February 1, 2022.
- ^
"FY 2021 Earnings Release, General Motors Financial Company"
. GM Financial. February 1, 2022.
- ^
Baker, Ahles & Kaskovich (June 23, 2017).
"After XTO, who are downtown Fort Worth's biggest employers?"
.
Fort Worth Star-Telegram
. Retrieved
September 2,
2018
.
- ^
"About Us"
.
www.gmfinancial.com
. Retrieved
2021-06-16
.
- ^
"Fortune 500 2009: Top 1000 American Companies"
.
Fortune
. May 4, 2009
. Retrieved
2009-11-06
.
- ^
Diehlman, Steve (July 22, 2010).
"General Motors to Acquire AmeriCredit to Handle Customer Financing"
.
Motor Trend
.
- ^
"Sale of Fort Worth-based AmeriCredit to GM gets OK"
.
The Dallas Morning News
.
Associated Press
. September 20, 2010
. Retrieved
September 3,
2018
.
- ^
a
b
"GM and GM Financial Enter into Support Agreement"
(Press release). General Motors. September 4, 2014 – via
PR Newswire
.
- ^
"S&P revises General Motor's outlook to negative on coronavirus pressures"
.
S&P Global Market Intelligence
.
Reuters
. August 12, 2020.
- ^
"Fitch Affirms GM and GM Financial's IDRs at 'BBB-'; Outlook Stable"
. May 5, 2021.
- ^
"GM Financial to Acquire FinanciaLinx Corporation"
.
F&I and Showroom
. April 4, 2011
. Retrieved
September 3,
2018
.
- ^
"GM Financial agrees to buy Ally's international auto-finance business"
.
Automotive News
. November 21, 2012.
- ^
"GM Financial Completes Purchase of International Operations Joint Venture in China from Ally Financial"
(Press release).
Business Wire
. January 5, 2015.
- ^
McCaffrey, Orla; Colias, Mike (November 27, 2020).
"GM Plans to Seek Banking Charter to Grow Auto-Lending Business"
.
Wall Street Journal
.
External links
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- 1
Non-U.S. based parent company that owns subsidiaries headquartered in U.S.
- 2
Company still exists but is no longer in the automotive manufacturing business
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