GM ends $4.1 bln credit pact, says liquidity OK

DETROIT (Reuters) - General Motors Corp GM.N on Friday said it had terminated a $4.1 billion standby credit agreement with a syndicate of banks, saying it had sufficient liquidity without the borrowing arrangement.

GM had entered into the credit agreement in June 2007. The automaker had never borrowed under the terms of the deal, which was secured by GM's stake in its former finance arm GMAC.

"After reviewing its liquidity position, GM believes that it has sufficient liquidity and financial flexibility to meet its capital requirements in the first half of 2008 without the credit agreement," the company said in a filing with the U.S. Securities and Exchange Commission.

The borrowing agreement was to have expired in June. Bank of America (BAC.N) had been the syndication agent for the credit agreement. JPMorgan Chase Bank (JPM.N) was the administrative agent.

GM shares trimmed their losses after the announcement. The stock had hit a 20-month low in earlier trading on the New York Stock Exchange.

Shares in GM were down 1 percent, or 27 cents, to $23.65 just ahead of the close of trading.

At the time GM opened the $4.1-billion borrowing pact, it was headed into a round of contract talks with the United Auto Workers union. Some analysts saw the move as a defensive step in case it faced a lengthy work stoppage.

In October, GM signed a four-year deal on wages and benefits for over 73,000 UAW-represented factory workers.

(Reporting by Kevin Krolicki; Editing by Brian Moss)