GMAC further extends early deadline, has not received enough tenders to become bank holding company

By Angela McDaniels

Tacoma, Wash., Dec. 10 - GMAC LLC said it extended the early delivery time for the private exchange offers and tender offers for some of its debt securities and some Residential Capital, LLC debt securities to 5 p.m. ET on Dec. 12 from Dec. 9.

This is the third extension of the early delivery time, which was originally scheduled for Dec. 4. The expiration date for the offers remains 11:59 p.m. ET on Dec. 18.

Roughly $6.3 billion, or 22%, of the outstanding GMAC notes and about $2.0 billion, or 21%, of the outstanding ResCap notes have been tendered to date, according to a company news release.

GMAC said that based on the results of the offers so far, it would not obtain a sufficient amount of total regulatory capital in connection with the offers to meet the Federal Reserve's requirements for GMAC to become a bank holding company. The company needs to achieve at least $30 billion of total regulatory capital, and it needs roughly 75% participation in the offers in order to meet this condition.

The company does not, as a practical matter, believe it can make further changes to the offers following the new Dec. 12 deadline and consummate the offers prior to the end of the year. Accordingly, if it does not receive the needed amount of notes, it plans to withdraw its application to become a bank holding company.

If GMAC is unable to successfully convert to a bank holding company and complete the offers by Dec. 31, it would have a near-term material adverse effect on GMAC's business, results of operations and financial position, according to the release.

The exchange offers and tender offers for 33 series of outstanding GMAC and ResCap debt securities totaling $38 billion began on Nov. 20.

In the offers, GMAC is offering to purchase and/or exchange any and all of the notes series for, at the election of each eligible holder, either (a) new securities, consisting of (i) a combination of newly issued senior guaranteed notes for the old GMAC notes maturing prior to 2031 or a combination of new guaranteed notes and newly issued 8% subordinated notes due 2018 for old GMAC notes due 2031, and (ii) newly issued 5% perpetual senior preferred stock with a liquidation preference of $1,000 per share of a wholly owned subsidiary of GMAC; or (b) cash.

Global Bondholder Services Corp. (866 794-2200) is the information agent.

GMAC is a Detroit-based diversified financial services company.

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