GMAC Plans to Sell Its First FDIC-Guaranteed Notes
By John Detrixhe and Caroline Salas
June 2 (Bloomberg) -- GMAC LLC , the auto and home lender that received $13.5 billion in U.S. funds, plans to sell its first notes guaranteed by the Federal Deposit Insurance Corp., according to a person familiar with the offering.
The sale comes about a week after GMAC was cleared to sell $7.4 billion in government-backed debt as part of an effort to bolster its ability to finance car buyers and sellers. The Detroit-based company was permitted to convert to a bank holding company in December, getting access to the Treasury’s financial industry rescue program.
GMAC’s ability to use the FDIC’s Temporary Liquidity Guarantee Program is “absolutely critical” to the company’s survival, said Pete Hastings , a fixed-income analyst at Morgan Keegan & Co. in Memphis, Tennessee. The lender’s last benchmark dollar-denominated offering was in May 2007, when it issued $2 billion of notes , according to data compiled by Bloomberg.
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