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Delphi considers bond sales to boost pension plan

Buffalo Business First

June 30, 2003

Delphi Corp., the parent of Lockport-based Delphi Harrison Thermal Systems, reportedly is considering following the lead of General Motors Corp. by selling bonds in order to plug a major shortfall in its pension plan, Bloomberg News reports.

Delphi, the world's biggest supplier to the auto industry and largest manufacturer in Western New York with 4,400 employees, is named as one of several companies whose debt ratings were lowered by Standard & Poor's because of pension expenses that could choose to lock in fixed cost to cover their retiree benefits.

A spin-off from GM in 1999, Delphi already is planning to raise as much as $331 million by selling preferred shares in a real estate investment trust subsidiary.

General Motors on Wednesday raised its planned debt issue to $16.9 billion, making it the largest offering in U.S. history.

The sale of bonds, notes and convertibles is part of GM's effort to improve its financial flexibility and help fund its lagging U.S. pension plans.

Three years of declines in stocks and falling interest rates have led to pension fund losses that amount to an estimated record $239 billion deficit for the nation's 500 largest companies.