This is why PR campaigns are so very important and the big guys like GMAC know how to use them. How much could GMAC, LLC who specializes in auto and home lending receive? Well, GMAC, LLC won Federal Reserve approval to become a bank holding company is in line for as much as $6.3 billion in capital from the U.S. rescue plan, sited by CreditSights Inc.
According to Bloomberg, The lender also may issue as much as $17.5 billion of guaranteed debt under the government-backed Temporary Liquidity Guarantee Program, CreditSights analyst Richard Hofmann said in a report issued late yesterday.
GMAC, which is the primary lender to General Motors Corp. auto dealers, is facing a midnight deadline for debt holders to exchange $38 billion in bonds as part of its plan to reduce debt. The lender said it needed three-quarters of investors to approve the swap, and as of Dec. 17 holders of 58 percent of eligible notes had tendered.
“We believe GMAC has been less than clear in detailing how it would achieve adequate capital levels,” Hofmann wrote. “But with the primary regulator on board, the capital raise machinations seem almost a moot point.”
The debt exchange deadline remains 11:59 p.m. New York time today, GMAC spokeswoman Gina Proia said. The company declined to specify how much it hoped to raise by selling preferred shares to the government as part of the rescue package, she said.
The Fed used emergency powers Dec. 24 to approve GMAC’s request to become a bank holding company, citing turmoil in financial markets and the potential damage to GM, which has warned it’s running out of cash. GM and Cerberus Capital Management LP, GMAC’s majority owner, will give up control of the lender to comply with federal rules on who can own banks.
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