Liability management at general motors case solutions topic: evolution of a fortune 500 company & link the concept covered in theme 1 & 2 with the management evolution of the selected company fortune 500 rank 15 - general motors “a car for every purse and purpose – alfred p sloan jr, former president & ceo general motors.
Story linein feb 1992, gm plans to raise u$400m through a public offering noncallable five-year note, with a fixed interest rate of 7625%, guided by policy on liability portfolio management, the current structure of its liabilities, and mr bello’s best reading of trends in the bond markets.
In the case liability management at general motors , gm states the goal of their interest rate management program is: to actively m anage the central office liabilities to take advantage of the cyclical nature and volatility of domestic interest rates and shifts in the shape of the yield curve to reduce gm's overall cost of funds (tufano (1995).
Swot for liability management at general motors is a powerful tool of analysis as it provide a thought to uncover and exploit the opportunities that can be used to increase and enhance company’s operations. Subject areas: liability management financial engineering derivatives capital structure corporate treasury case setting: 1992 global automobile maker, corporate treasury activities, automobile manufacturing.
The financial policy of general motors is expressed by the set of key activities by financial management this includes the management of liability structure, dividends, leverage, risk management and the management of cash balances as well the liability management policies of general motors are critical. Liability management at gm present by: jianan lin, chenhao li nolfi trey, hook jerry & financial institutions are typically more highly levered than industrial firms, and a greater percentage of their liabilities are interest bearing.
Liability management at general motors 1 gm past financing policy gm past financing policy is very conservative with limited sophistication of financial products use.