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Getbig Main Boards => Politics and Political Issues Board => Topic started by: Bindare_Dundat on October 28, 2009, 08:11:17 AM
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GMAC Asks for Fresh Lifeline
Lender in Advanced Talks for Third Slug of Bailout
By DAN FITZPATRICK and DAMIAN PALETTA
In a stark reminder of how some battered financial firms remain dependent on government lifelines, GMAC Financial Services Inc. and the Treasury Department are in advanced talks to prop up the lender with its third helping of taxpayer money, people familiar with the matter said.
The U.S. government is likely to inject $2.8 billion to $5.6 billion of capital into the Detroit company, on top of the $12.5 billion that GMAC has received since December 2008, these people said. The latest infusion would come in the form of preferred stock. The government's 34% stake in the company could increase if existing shares eventually are converted into common equity.
The willingness by Treasury officials to deepen taxpayer exposure to GMAC reflects the troubled company's importance to the revival of the auto industry. Founded in 1919, GMAC has $181 billion in assets and is a major financing provider on car purchases from General Motors Co. and Chrysler LLC. The new capital would help firm up GMAC's balance sheet and solidify its auto-loan business.
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NEW YORK (MarketWatch) -- GMAC is selling $2.9 billion in government-guaranteed debt, expected to price Wednesday, according to Informa Global Markets. The sale comes as the troubled lender, once the financing arm of General Motors, is reportedly looking for another government bailout. The 3-year securities will be backed by the Federal Deposit Insurance Corp.'s Temporary Liquidity Guarantee Program initiated about a year ago to help financial institutions access the credit markets by effectively lending them the government's AAA rating in exchange for a fee. The program has allowed banks to borrow billions at much cheaper rates than they would have paid amid the credit crisis. The program is slated to end on Oct. 31, though a six-month emergency guarantee may be applied for after that.
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NEW YORK (MarketWatch) -- GMAC is selling $2.9 billion in government-guaranteed debt, expected to price Wednesday, according to Informa Global Markets. The sale comes as the troubled lender, once the financing arm of General Motors, is reportedly looking for another government bailout. The 3-year securities will be backed by the Federal Deposit Insurance Corp.'s Temporary Liquidity Guarantee Program initiated about a year ago to help financial institutions access the credit markets by effectively lending them the government's AAA rating in exchange for a fee. The program has allowed banks to borrow billions at much cheaper rates than they would have paid amid the credit crisis. The program is slated to end on Oct. 31, though a six-month emergency guarantee may be applied for after that.
GREEN SHOOTS!
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GREEN SHOOTS!
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GREEN SHOOTS!
I like the last line.
The program has allowed banks to borrow billions at much cheaper rates than they would have paid amid the credit crisis. The program is slated to end on Oct. 31, though a six-month emergency guarantee may be applied for after that ::)
Seems to be a trend these days.