NEW YORK — General Motors is managing a delicate balancing act as it prepared to draw down $16 billion in credit lines while refinancing debt of similar size, facing a longer than expected shutdown of plants and considerable revenue losses.
The automaker gave notice to lenders that it would borrow an existing credit facility almost in its entirety on Tuesday.
But the decision to draw down on the credit lines comes as the company undertakes customary refinancing discussions for $16.5 billion in debt led by JP Morgan.
GM faces a significant loss in revenue because of the shutdown of North American plants that could extend beyond March 30.
On Wednesday, Moody’s Investors Service said it could downgrade GM’s Baa2 bank credit facility rating and a Baa3 senior unsecured debt rating into junk territory.
“A severe disruption in automotive demand due to the coronavirus combined with the possibility of a follow-on economic recession, will place considerable pressure on GM’s cash flow…