GM has given new offer to bondholders-source

WASHINGTON, March 27 (Reuters) - General Motors Corp (GM.N) has given bondholders holding over $27 billion in its debt a new proposal on terms for exchanging most of that debt into equity, according to a person with direct knowledge of the negotiations.

GM sent a letter to representatives of GM bondholders earlier in the week, according to the person who asked not to be named because of the confidential nature of the talks.

Bondholders had complained in a letter sent on Sunday to U.S. Treasury Secretary Timothy Geithner that they had been shut out of negotiations on restructuring GM's debt since a March 5 meeting with members of the Obama administration's autos task force.

Under the terms of GM's $13.4 billion in emergency loans from the Treasury, its bondholders face pressure to accept a payout of just 33 cents on the dollar in equity in a recapitalized company.

But the bond exchange remains voluntary and bondholders have said those proposed terms would not be attractive enough to get widespread participation from GM debt investors.

A GM spokeswoman could not be immediately reached for comment.