GM to sell up to US$55 billion in auto loans

General Motors Corp. (GM) announced Tuesday that it had agreed to sell as much as 55 billion dollars in auto loans to Bank of America Corp. over five years, giving the automaker another source of financing.

Bank of America, the second-largest US bank, would initially buy 5 billion dollars and would purchase as much as an additional 10 billion dollars in each of the five fiscal years from July 2005 to June 2010. The 10 billion dollars represented as much as half of the automaker's car and truck loans available for sale each year.

GM now typically issued about 40 billion dollars a year in loans, leases and other financing to retail car and truck customers, and about 20 billion dollars to 25 billion dollars of those funds would be available for sale to Bank of America Corp.

Analysts at Moody's Investors Service said that it was an additional source of liquidity for GM's finance unit, but Moody would not change its ratings view of GM.

Source: Xinhua