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News Summary: GM buys $3.2B in preferred stock

The Associated Press

THE DEAL: General Motors has agreed to pay $3.2 billion for 120 million shares of preferred stock held by a union trust fund that pays retiree health care bills. To pay for it, the company plans to sell more than $3.2 billion in notes by Sept. 30.

THE REASON: GM wants a lower interest rate on the shares, which pay a dividend of 9 percent annually. It's essentially refinancing the debt at a lower rate.

NEW DEVELOPMENT: After GM announced the deal, Moody's Investors Service upgraded the company's credit rating to investment grade. It had been junk bond status since 2005.