![]() ![]() GMAC has been nearly sidelined as its losses have mounted. dealers that rely on GMAC to help finance the cars on the showroom floor, reviving GMAC could not come soon enough. would be used to increase GMAC’s preferred shares - or some combination of the two.įor G.M., and the many G.M. Bullock, is that the government would allow the deal to go through with less than 75 percent of the bondholders agreeing or that some of the federal aid for G.M. “It is too big to fail.”Īmong the possibilities, according to Mr. “One way or another, by hook or by crook, GMAC will become a bank holding company,” Mr. will come up with a “Plan B” to allow GMAC, which was founded in 1919, to have enough regulatory capital to qualify as a bank holding company. David Bullock, a managing director of Advent Capital Management and a large GMAC bondholder, thinks that bondholders will eventually agree to the deal. Other investors have been more supportive of the offer. It is unclear whether Pimco owns enough GMAC bonds to block the exchange offer on its own, but as the nation’s largest bond trading firm it is an influential player in the credit markets. “Yet, Cerberus said, ‘If you don’t do this by the end of the year, we are filing bankruptcy.’ It just didn’t sound right.” “It wasn’t like General Motors, where they had a cash burn and were losing a billion dollars a month,” he added. Gross, who is chief investment officer of the Pacific Investment Management Company, or Pimco. “We wondered why GMAC was in such a desperate rush - they didn’t have any immediate financing needs, they didn’t have any issues that they had to repay,” said Mr. Gross said bondholders were being bullied into exchanging their bonds and he wanted Cerberus Capital Management, the private equity firm that owns 51 percent of GMAC, to put more money into the company. Gross, said on Tuesday that his firm was unwilling to exchange its significant holdings of GMAC bonds, because the company was asking investors to forgive nearly half of what the company owed them. Meanwhile, GMAC has sweetened the offer and may even extend a Friday deadline for the bond-exchange deal. To date, some important bondholders have balked. But it is unclear whether GMAC’s bondholders will go along with the program. This move would enable GMAC to issue more car loans by accessing low-cost money under the Treasury’s $700 billion financial plan. Holders of GMAC bonds are being asked to support a complicated transaction to reduce GMAC’s outstanding debt and allow it to become a bank holding company. Personal Loans for 670 Credit Score or Lower Personal Loans for 580 Credit Score or Lower Best Debt Consolidation Loans for Bad Credit ![]()
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