You've got to take your hat off to General Motors. At the end of last month the embattled US auto company raised about $47 billion. The banks stumped up $29.5 billion in syndicated loans, bond market investors handed over $13.5 billion, and a $4 billion convertible bond accounted for the rest. Proceeds from the bonds and convertibles were explicitly earmarked for sorting out GM's pension fund liabilities.
That GM needed to do something is beyond question. That it managed to raise so much so quickly must have soothed raw nerves at head office. But the real news is that fund managers were so willing to part with their clients' money.
Just eight months ago GM was nearly as much a pariah in the minds of corporate bond investors as Ford. The two were huge borrowers and a significant part of the bond indices at a time when investors were craving diversification and reduced exposure to individual companies. Now, apparently, all those worries are forgotten.
Why is that? After all, the US economy is still chugging along at the same low-growth rate, and churning out the same conflicting data. Even the Fed seems to be undecided.