GMAC May Receive Third Bailout From U.S. Government
October 28th, 2009Via: Bloomberg:
GMAC Inc., the lender that received two government bailouts totaling $13.5 billion, is in talks with the Treasury Department to receive a third lifeline, a person familiar with the matter said.
The U.S. government may inject an additional $2.8 billion to $5.6 billion into GMAC, the person said, declining to be identified because the transaction hasn’t been completed. The deal would involve the issuance of preferred stock, allowing the government to expand its 35.4 percent stake in the Detroit-based company if existing shares are converted into common equity, the person said.
“It’s outrageous that the taxpayers are being asked yet again to support a troubled enterprise,” said Sean Egan, president of Egan-Jones Ratings Co. in Haverford, Pennsylvania. “When will it end?”
GMAC is also raising funds by selling $2.9 billion of three-year notes guaranteed by the Federal Deposit Insurance Corp., according to a person familiar with the offering, speaking anonymously because terms aren’t set. GMAC spokeswoman Gina Proia and FDIC spokesman Andrew Gray declined to comment.
