General Motors' $3 billion revolver traded up three-and-a-half points to 84 as banks hedged against activity in the credit default swap market. A trader said GM's CDS had tightened because of new bidding for General Motors Acceptance Corp., causing increased hedging on the debt in the bank market. "Everyone trades the revolver against the CDS market," said a trader. Another added that trading on the revolver is closely driven by conditions in the CDS market. He said that there had been big, chunky trades on the revolver.
General Motors received a new bid from a group of investors led by Kohlberg Kravis Roberts & Co. for GMAC last week. The group reportedly submitted a $12.5-13 billion bid for the finance business. The new bid is an alternative to Cerberus Capital Management and Citigroup, which are also interested in buying a controlling stake. A GM spokesman could not be reached for comment.