![]() Previously, GMAC was more limited in the GM-related assets that could be originated in the Bank due to section 23A of the Federal Reserve Act. GMAC received an expanded exemption from the Federal Reserve to allow Ally Bank, formerly GMAC Bank, to originate a limited amount of GM-related retail and wholesale assets, subject to certain conditions. GMAC and the Bank have also committed to maintain Bank capital at a level well above the regulatory minimums. The plan will reflect GMAC’s management of Ally Bank’s funding and deposit costs with a focus on diversifying funding sources and reducing the Bank’s overall cost of deposit funding. In connection with receiving FDIC approval, GMAC is developing a funding plan which it has committed to provide to the FDIC and the Federal Reserve. GMAC has received approval to participate in the FDIC’s TLGP for up to $7.4 billion, which would permit the company to issue new FDIC-guaranteed debt. Treasury upon the occurrence of certain events. GMAC may only convert additional mandatorily convertible membership interests to common membership interests if certain other conditions are met. ![]() Treasury owning in excess of 49 percent of GMAC’s common membership interests. These interests mandatorily convert to common membership interests after seven years and may be converted in advance of that time by GMAC with the approval of the Federal Reserve if such conversion would not result in the U.S. Treasury has an annual distribution rate of nine percent payable quarterly. Treasury has indicated that it may be willing to provide additional new capital, GMAC will evaluate other alternatives to meet its capital requirements. Consistent with the S-CAP program requirements, GMAC intends to submit a Capital Plan to the Federal Reserve Bank of Chicago by Jwith respect to the remaining capital required. Treasury is new capital for the company toward this program and reduces the level of new capital required to $5.6 billion. ![]() The agreement provides GMAC with credit support for certain losses that may be incurred during the transition period, which allows time for GMAC to evaluate the creditworthiness of each Chrysler dealer.Īs previously disclosed under the S-CAP program, GMAC is required to raise $11.5 billion of Tier 1 common or contingent common capital, $9.1 billion of which must be new Tier 1 capital. Treasury to aid in managing the risks related to expeditiously extending credit to Chrysler dealers and customers. GMAC has also entered into a transition support agreement with Chrysler LLC and the U.S. In order to ensure an orderly transition of wholesale financing activities, GMAC has signed a cooperation agreement with Chrysler Financial Services Americas LLC. ![]() GMAC will begin offering wholesale and retail credit to Chrysler dealers and customers immediately. GMAC previously announced an agreement with Chrysler to provide automotive finance products and services to Chrysler dealers and customers. Treasury immediately exercised the warrants and GMAC issued an additional $375 million of MCP. The investment included $4 billion of MCP related to GMAC’s agreement with Chrysler LLC to provide automotive financing to Chrysler dealers and customers and $3.5 billion of MCP toward the Supervisory Capital Assessment Program (S-CAP) requirement. In connection with the government’s capital investment, GMAC has sold $7.5 billion of mandatorily convertible preferred (MCP) membership interests and warrants to the U.S. “Much like last year, 2009 is proving to be a time of landmark actions for GMAC – – executing the Chrysler agreement, launching a new brand for our bank, and now taking a meaningful step forward in permanently improving our access to cost-effective funding.” “These actions represent another major step in stabilizing and strengthening GMAC,” said GMAC Chief Executive Officer Alvaro G. Treasury, with three independent directors to be promptly named by the board. GMAC also reconstituted its board of directors and named two appointees from the U.S. Department of the Treasury, approval by the Federal Deposit Insurance Corporation (FDIC) to participate in the Temporary Liquidity Guarantee Program (TLGP), and an expanded exemption granted by the Federal Reserve to originate GM-related assets at GMAC’s bank, recently renamed Ally Bank. The actions include a $7.5 billion capital investment from the U.S. DETROIT, /PRNewswire/ – GMAC Financial Services today announced several key actions that significantly improve the company’s capital position and access to liquidity.
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