When General Motors was bailed out during the financial crisis of 2009, it issued two series of warrants — GM Series A Warrants and GM Series B Warrants. On Sunday, July 10th, 2016, the Series A warrants are set to expire.
Those not intricately familiar with the warrant as a financial instrument should know that it is a type of security that entitles its holder to purchase the underlying stock of the issuing company at a fixed price (called exercise price) before the expiry date of the warrant.
| Item | GM Stock | GM Series A Warrants | GM Series B Warrants |
|---|---|---|---|
| Expiration date | N/A | July 10, 2016 | July 10, 2019 |
| Strike Price | N/A | $10.00 | $18.33 |
Originally issued in July 2009, the GM Series A warrants have been trading under the symbol (NYSE: GM.WS.A). Though they will officially expire on July 10th, 2016, the expiration date — a Sunday — is not a trading day on the NYSE, so the warrants will not be exercisable after the Depository Trust & Clearing Corporation’s (DTCC) cutoff time for exercises on Friday, July 8th, 2016. As such, the NYSE has notified GM that it will suspend trading in the warrants after the close of trading on July 1st, 2016 so that all trades can be settled by July 8th, 2016.
According to GM, there were approximately 11.7 million of outstanding redeemable GM Series A warrants as of June 24th, 2016, which have an exercise price of $10.00 per share. GM further states that any warrant not exercised prior to the cutoff time on July 8, 2016 will expire and be canceled, and the holder will not receive any shares of GM common stock.
Warrant holders interested in obtaining further information on exercising the warrants should contact their broker or the U.S. Bank National Association, which is GM’s warrant agent. Meanwhile, brokers are encouraged to contact U.S. Bank National Association or the DTCC in advance of the expiration date to confirm the procedures for exercising warrants and payments of exercise prices.
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