It was announced today by GMAC Financial Services that it has sold $5.0 billion of GMAC's preferred membership interests and warrants to the U.S. Department of the Treasury as a member of the Troubled Assets Relief Program established under the Emergency Economic Stabilization Act of 2008.
GMAC also made public that GM and an associate of Cerberus Capital Management made a contribution to GMAC the $750 million subordinated participations in the $3.5 billion senior secured credit facility, as modified, between GMAC and Residential Capital, LLC as a trade for new common equity of GMAC.
Additionally, GMAC made the announcement that GM and an associate of Cerberus Capital Management entered into a contract to buy $1.25 billion worth of new common equity.
The U.S. Treasury and GM planned to enter into a contract for the Treasury to finance GM's share of the new common equity.
GMAC also made it public that the conditions to its formerly announced separate private exchange offers and cash tender offers have been satisfied and that GMAC has accepted all of the validly tendered GMAC old notes and ResCap old notes. Both the offers of GMAC ResCap are anticipated to settle immediately.
GMAC got approval of its bank holding fimr application from the U.S. Federal Reserve Board on Dec. 24, 2008. As a bank holding firm, GMAC has enhanced access to financing to offer funds to consumers and businesses.
Specifically, the firm plans to move quickly to continue automotive loans to a wider range of customers to support the availability of credit to consumers and businesses for the purchase of vehicles.