| NEW YORK
NEW YORK General Motors Corp's bondholders on Friday said they remained opposed to the company's proposed bond exchange, a position which threatens to send GM into bankruptcy soon, while the Obama administration said it would not extend talks.
A day after the automaker reached a preliminary restructuring deal with unions, GM's biggest bondholders, with some $27 billion in unsecured debt, still intend to reject GM's offer for a 10 percent equity stake, a spokesman for the creditors said.
Bondholders last month pushed for a 58 percent stake in GM, which President Obama's Auto Task Force has signaled is unrealistic.
"It's been a universal no from the get-go," said Nevin Reilly, a spokesman for the creditors' committee. "Bondholders are being seen as speculative bad guys, but bondholders are investors, many of whom put their retirement money into GM."
The big bondholders have no formal relationship with smaller retail GM investors, but Reilly said they have received many calls seeking to coordinate a response.
"You know the bondholders are going to have to take some haircut," Austan Goolsbee, a member of the Obama administration's auto task force, told Reuters Television on Friday. "Everybody has got to put some skin in the game."
Goolsbee said he expected GM's restructuring efforts to run right up to the June 1 deadline, set by the Obama administration, for a viable turn-around plan.
Bondholders have until May 27 to decide whether to exchange their debt. June 1 is when a $1 billion bond payment will come due, although GM has said it does not expect to make the payment as it will either be voluntarily restructuring its debt or doing it through bankruptcy.
Goolsbee said "everybody has got to come together and make some sacrifices and that includes the bondholders for sure," he told Reuters.
GM's chief executive, Fritz Henderson, earlier this month said the U.S. Treasury had set a maximum of 10 percent equity for bondholders in any restructuring.
Privately, GM's biggest bondholders and attorneys have resorted to black humor, referring to the automaker as "Government Motors" or "General Mess."
One bondholder, who declined to be identified, said the committee balked at the GM offer after hearing details that the United Auto Workers union would get an 39 percent equity stake -- nearly four times the offer for GM bondholders -- in exchange for the union's much smaller $10 billion claim.
"If we have to go to bankruptcy, we have to go the bankruptcy and maybe we'll get a better deal," one bondholder source said on Friday.
Plans for restructuring competitor Chrysler, which filed for bankruptcy last month, and General Motors, would leave investors with far lower payouts than they expected based on their legal rights and priority of claims, analysts said.
"We could see some 11th hour efforts to strike a deal, but GM has said the government is not going to offer more than 10 percent," said Shelly Lombard, a high-yield analyst at Gimme Credit in New York. "The probability of bankruptcy is very high."
In another sign that creditors, GM, and the auto task force are unlikely to bridge their impasse, GM bonds have been trading for pennies on the dollar for months.
GM's 8.375 percent notes due in 2003 traded little changed at about 5 cents on the dollar on Friday, yielding nearly 150 percent. Those junk bonds traded as high as 10 cents in late April.
(Editing by Leslie Adler)