GMAC Financial Services, and its wholly owned subsidiary,
Residential Capital, LLC (ResCap), today announced one of the largest
global refinancings ever completed. The companies have executed a
comprehensive series of transactions, which include extending key bank
facilities, increasing the amount of available funding and further
enhancing liquidity positions. Also, ResCap successfully extended
unsecured debt maturities, renewed critical funding lines, and gained
further liquidity support from GMAC and its shareholders.
"I am extremely proud of our team's achievement. Executing a
transaction of this magnitude and complexity in such a challenging
capital markets environment demonstrates the dedication of our people
and the international banking community's confidence in our company,"
said GMAC Chief Executive Officer Alvaro G. de Molina. "We look forward
to building GMAC's competitive advantage and strengthening our core
"This is one of the largest and most complex refinancings we have
undertaken," said James B. Lee, Jr., vice chairman of JPMorgan Chase.
"The global banking community has come together to support GMAC and its
terrific management team, representing the market's confidence in the
companies and GMAC's shareholders - General Motors and Cerberus."
"Given GMAC's strategic importance to GM, we are delighted with the
outcome of this refinancing," said GM Chief Operating Officer Fritz
Henderson. "We're pleased with the response from the capital markets
and with the resourcefulness and commitment of our partner, Cerberus."
The global refinancing includes:
-- Over $60 billion of refinanced debt and new facilities, including both loan facilities and bond issues.
-- More than 50 institutions from around the globe are participating in the refinancing.
-- GMAC provided a $3.5 billion two-year credit facility to ResCap,
which includes $750 million of first loss protection from General
Motors Corp. and Cerberus Capital Management, L.P.
-- $2.4 billion of actions taken by GMAC and Cerberus Capital to support ResCap's near term liquidity.
"Cerberus is confident of GMAC's future and is gratified by the
support the company has received from the capital markets, as well as
our continuing constructive partnership with GM. GMAC has the best
people in place to run this world-class global company, and we remain
excited about the future," said Steven Feinberg, CEO of Cerberus
Key Elements of the Refinancing
GMAC obtained a new, globally syndicated $11.4 billion secured
revolving credit facility with a three-year maturity, and renewed the
one-year, syndicated commercial paper back-up facility, New Center
Asset Trust (NCAT), in the amount of $10 billion.
ResCap extended for one year the maturity on substantially all of
its bilateral bank facilities totaling approximately $11.6 billion and
obtained a new $2.5 billion syndicated whole loan repurchase facility.
ResCap executed private exchange and cash tender offers for U.S.
dollar equivalent $14.0 billion in aggregate principal amount of its
outstanding debt, thereby retiring principal and extending maturities.
(Details of these transactions were issued in a separate press release
and can be found on media.gmacfs.com .)
"This refinancing is expected to provide GMAC and ResCap with the
important liquidity and financial resources to execute our business
plan," said GMAC's Chief Risk Officer Sam Ramsey. "The collaboration
and support of our shareholders and global banking partners was
instrumental in completing this transaction."
"GMAC has a long and successful track record and Citi is pleased to
assist GMAC in this refinancing in these turbulent markets. The support
that GMAC has garnered in the syndicated loan and bond markets is a
vote of confidence in this management team and their plans," said Chad
A. Leat, chairman of Citi's Alternative Asset Group.
The syndicated loan facilities were led by JPMorgan, Citi, Bank of
America and Royal Bank of Scotland. The ResCap bond exchange and cash
tender offers were led by Bank of America and Citi .