Hedge funds and other investors stand to make billions of dollars on credit insurance contracts if GM declares bankruptcy, a prospect that is complicating efforts to agree a restructuring plan for the automaker, analysts say. Holders of $27bn in GM bonds have until June 1 to decide whether to swap their debt for a 10% equity stake in the company as part of an offer that would give the US government 50% of the shares, a United Auto Workers union healthcare fund 39% and existing shareholders 1%.

This entry was posted by Gwen Robinson on Tuesday, May 12th, 2009 at 4:59 and is filed under Capital markets, Hedge funds. Tagged with gm. Edit this entry.