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GM to sell notes, buy back preferred stock

DETROIT (AP) - General Motors says it will spend $3.2 billion to buy preferred stock from a union trust fund that pays retiree health care bills.

The company says it's buying 120 million shares at $27 per share. The deal is contingent on the company closing a sale of senior notes by the end of this month. GM says in a statement that the note sale's proceeds will fund the buyback and be used for other general corporate purposes.

The size of the note sale wasn't revealed. But GM says the closing will take place on or before Sept. 30. The notes will come with five-, 10- or 30-year terms.

After the buyback, the trust will hold 140 million GM preferred shares. The company currently pays 9 percent interest on the shares.