GMAC Files With Fed To Become Bank Holding Company

GMAC Financial Services has submitted an application to the U.S. Federal Reserve Board of Governors for approval to become a bank holding company under the Bank Holding Company Act of 1956, as amended.

GMAC has also submitted an application to the U.S. Treasury to participate in the Capital Purchase Program created under the Emergency Economic Stabilization Act of 2008, conditional upon becoming a bank holding company.

In addition, the company says it has commenced separate private exchange offers and cash tender offers to purchase and/or exchange certain of its and its subsidiaries' and Residential Capital LLC's outstanding notes held by eligible holders for cash, newly issued notes of GMAC and, in the case of the GMAC offers only, preferred stock of a wholly owned GMAC subsidiary, upon the terms and subject to the conditions set forth in the applicable confidential offering memoranda, each dated Nov. 20, and the related letters of transmittal.

The purpose of the offers is to increase GMAC's capital levels while reducing the amount of GMAC's and ResCap's outstanding debt in connection with GMAC's capital plan relating to its application to become a bank holding company.

Source: GMAC

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