Report: GMAC is negotiating another cash infusion

Article by Christian Andrei, on August 27, 2010

GMAC Financial Services' $12.5 billion in federal aid is apparently not enough as it is negotiating for additional taxpayer funds because it has not raised sufficient capital to endure a deepening recession, according to a statement from the Federal Reserve. Out of the 10 large banks ordered last May to raise capital, GMAC was the only one that didn't meet its goal. 

The Fed said that the GMAC is expected to meet its remaining buffer need by accessing the TARP Automotive Industry Financing Program.

The auto lender is currently in discussions with the U.S. Treasury on the structure of its investment. The U.S. Treasury and Fed ordered the banks to take stress tests last spring in a bid to reassure investors that they would be able to withstand a deepening recession.

Following the stress test results in early May, GMAC was asked to raise $11.5 billion in six months, with a deadline of Monday. 

GMAC had then quickly received a $7.5 billion federal capital injection and has sold U.S.-backed debt. The investment came on top of emergency government aid GMAC received in December to keep it out of bankruptcy.

GMAC said that it will need less funds than were expected at the time of the tests in May, the U.S. Treasury said.

Department officials said that they had predicted that the government would need to contribute more capital to GMAC, which had little ability to sell shares because it was a privately held firm.

Topics: gmac

If you liked the article, share on:

Comments

Login or Create new account to add a comment!

Recommended

Back in 2009, Nissan first introduced the Nissan Leaf, the company’s first all-electric vehicle. LEAF stands for Leading Environmentally-friendly Affordable Family car and this particular EV has been considered as...
by - December 3, 2016
In the minivan segment, the 2017 Chrysler Pacifica is already impressive in terms of fuel economy figures – as rated by the United States Environmental Protection Agency. In fact, the...
by - December 2, 2016
Having a blacked-out Bentley Mulsanne Speed is already menacing by itself but by naming it as the Bamford X, it became all the more imposing. This model was made by...
by - December 2, 2016
We have good news for those who are waiting for the latest version of the Mazda CX-5 compact crossover. It was just unveiled in November at the 2016 Los Angeles...
by - December 2, 2016
Those familiar with racing know that Marco Wittmann’s win during the 2016 Deutsche Tourenwagen Masters held last May was noteworthy as it was his second title in four seasons. In...
by - December 2, 2016
Facebook

Youtube Channel

Tip Us
Do you have a tip for us?
Did you film an important event?
Contact us
Newsletter
Subscribe to our newsletter!
Subscribe
Galleries