GMAC successfully completes exchange, tender offers, gets $5 billion investment from Treasury

By Angela McDaniels

Tacoma, Wash., Dec. 31 - GMAC LLC said it received and accepted tenders for $17.5 billion, or 59%, of its outstanding notes and $3.7 billion, or 39%, of Residential Capital, LLC's notes in the private exchange offers and tender offers it began in November.

In addition, GMAC received approval from the Federal Reserve Board on Dec. 24 to become a bank holding company and sold $5 billion of preferred membership interests and warrants to the U.S. Department of the Treasury on Monday under the Troubled Asset Relief Program.

GMAC also announced that General Motors Corp. and an affiliate of Cerberus Capital Management agreed to purchase $1.25 billion of new common equity and contributed to GMAC the $750 million subordinated participations in the $3.5 billion senior secured credit facility between GMAC and ResCap in exchange for new common equity of GMAC.

The Treasury and GM plan to enter into an agreement for the Treasury to fund GM's share of the new common equity, the news release stated.

The company said it plans to act quickly to resume automotive lending to a broader spectrum of customers.

Tender, exchange offers

As previously reported, the exchange offers and tender offers for 33 series of outstanding GMAC and ResCap debt securities totaling $38 billion began on Nov. 20. The early delivery time was 5 p.m. ET on Dec. 19, and the offer expired on Dec. 26.

The company offered to purchase and/or exchange any and all of the notes series for, at the election of each noteholder, 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 9% perpetual senior preferred stock with a liquidation preference of $1,000 per share of a wholly owned subsidiary of GMAC; or (b) cash.

The cash elections for the offers were oversubscribed. As a result, noteholders who made cash elections will receive cash for a percentage of their tendered notes - 23.2% for GMAC notes and 47.8% for ResCap notes - and the remainder of the tendered notes will be exchanged for new securities.

GMAC said it will issue $11.9 billion of new notes and $2.6 billion of new preferreds in exchange for its old notes and $688 million of new GMAC 7½% senior notes due 2013 and $483 million of new GMAC 8% subordinated notes due 2018 in exchange for ResCap's notes.

GMAC results

Specifically, GMAC received tenders for and accepted:

• €309.19 million of its €750 million Euribor plus 125 basis points notes due 2009. In exchange for these notes, GMAC will issue $323.1 million of new notes. Holders were offered $850 in cash or $850 of new senior guaranteed notes and $150 of preferreds;

• €225.68 million of its €1.25 billion 4¾% notes due 2009. In exchange for these notes, GMAC will issue $211.89 million of new notes. Holders were offered $830 in cash or $850 of new senior guaranteed notes and $150 of preferreds;

• $149.68 million of its $250 million 6½% notes due 2009. In exchange for these notes, GMAC will issue $126.98 million of new notes. Holders were offered $765 in cash or $850 of new senior guaranteed notes and $150 of preferreds;

• $1.18 billion of its $2.40 billion 7¾% notes due 2010. In exchange for these notes, GMAC will issue $778.85 million of new notes. Holders were offered $815 in cash or $850 of new senior guaranteed notes and $150 of preferreds;

• €36.73 million of its €500 million 5¾% notes due May 2010. In exchange for these notes, GMAC will issue $34.33 million of new notes. Holders were offered $720 in cash or $825 of new senior guaranteed notes and $175 of preferreds;

• €456.48 million of its €1 billion 5¾% notes due September 2010. In exchange for these notes, GMAC will issue $448.95 million of new notes. Holders were offered $650 in cash or $825 of new senior guaranteed notes and $175 of preferreds;

• £51.83 million of its £200 million 6 5/8% notes due 2010. In exchange for these notes, GMAC will issue $48.83 million of new notes. Holders were offered $600 in cash or $825 of new senior guaranteed notes and $175 of preferreds;

• $1.20 billion of its $2 billion 7¼% notes due 2011. In exchange for these notes, GMAC will issue $802.16 million of new notes. Holders were offered $700 in cash or $825 of new senior guaranteed notes and $175 of preferreds;

• $174.28 million of its $400 million 6% notes due April 2011. In exchange for these notes, GMAC will issue $122.61 million of new notes. Holders were offered $650 in cash or $825 of new senior guaranteed notes and $175 of preferreds;

• €594.07 million of its €1.50 billion 5 3/8% notes due 2011. In exchange for these notes, GMAC will issue $570.44 million of new notes. Holders were offered $580 in cash or $825 of new senior guaranteed notes and $175 of preferreds;

• $4.35 billion of its $5.45 billion 6 7/8% notes due 2011. In exchange for these notes, GMAC will issue $3.09 billion of new notes. Holders were offered $650 in cash or $825 of new senior guaranteed notes and $175 of preferreds;

• $872 million of its $1 billion 6% notes due December 2011. In exchange for these notes, GMAC will issue $562.27 million of new notes. Holders were offered $630 in cash or $825 of new senior guaranteed notes and $175 of preferreds;

• $544.78 million of its $1 billion 7% notes due 2012. In exchange for these notes, GMAC will issue $357.49 million of new notes. Holders were offered $630 in cash or $825 of new senior guaranteed notes and $175 of preferreds;

• $613.70 million of its $1 billion 6 5/8% notes due 2012. In exchange for these notes, GMAC will issue $407.35 million of new notes. Holders were offered $620 in cash or $825 of new senior guaranteed notes and $175 of preferreds;

• €136.77 million of its €300 million 6% notes due 2012. In exchange for these notes, GMAC will issue $129.26 million of new notes. Holders were offered $600 in cash or $825 of new senior guaranteed notes and $175 of preferreds;

• $1.20 billion of its $2 billion 6 7/8% notes due 2012. In exchange for these notes, GMAC will issue $784.68 million of new notes. Holders were offered $620 in cash or $825 of new senior guaranteed notes and $175 of preferreds;

• $1.19 billion of its $1.75 billion 6¾% notes due 2014. In exchange for these notes, GMAC will issue $764.65 million of new notes. Holders were offered $590 in cash or $800 of new senior guaranteed notes and $200 of preferreds;

• $471.62 million of its $593.72 million Libor plus 220 bps notes. In exchange for these notes, GMAC will issue $294.77 million of new notes. Holders were offered $550 in cash or $800 of new senior notes and $200 of preferreds; and

• $3.03 billion of its $3.97 billion 8% notes due 2031. In exchange for these notes, GMAC will issue $2 billion of new notes. Holders were offered $600 in cash or $500 of new senior notes and $350 of new subordinated notes and $150 of preferreds.

ResCap results

As for the ResCap offers, GMAC received tenders for and accepted:

• $6.23 million of ResCap's $62.55 million Libor plus 310 bps notes due April 17, 2009, which were exchangeable for $300 of new senior notes and $250 of new subordinated notes. These notes had no cash election option;

• $15 million of ResCap's $205.45 million Libor plus 383 bps notes due April 17, 2009, which were exchangeable for $300 of new senior notes and $250 of new subordinated notes. These notes had no cash election option;

• $12.94 million of ResCap's $131.6 million Libor plus 310 bps notes due May 22, 2009, which were exchangeable for $300 of new senior notes and $250 of new subordinated notes. These notes had no cash election option;

• $830.51 million of ResCap's $1.57 billion 8½% notes due May 15, 2010, which were exchangeable for $500 in cash or $750 of new senior notes;

• $429.21 million of ResCap's $1.25 billion 8 3/8% notes due June 30, 2010, which were exchangeable for $220 in cash or $200 of new senior notes and $300 of new subordinated notes;

• €18.10 million of ResCap's €360.99 million Euribor plus 345 bps notes due Sept. 27, 2010, which were exchangeable for $210 in cash or $200 of new senior notes and $300 of new subordinated notes;

• $9.37 million of ResCap's $217.8 million 8% notes due Feb. 22, 2011, which were exchangeable for $200 in cash or $150 of new senior notes and $350 of new subordinated notes;

• €12.30 million of ResCap's €110.9 million 7 1/8% notes due May 17, 2012, which were exchangeable for $200 in cash or $150 of new senior notes and $350 of new subordinated notes;

• $15.01 million of ResCap's $94.97 million 8½% notes due June 1, 2012, which were exchangeable for $200 in cash or $150 of new senior notes and $350 of new subordinated notes;

• $401.42 million of ResCap's $874.83 million of 8½% notes due April 17, 2013, which were exchangeable for $200 in cash or $150 of new senior notes and $350 of new subordinated notes;

• £3.97 million of ResCap's £40.75 million 8 3/8% notes due May 17, 2013, which were exchangeable for $200 in cash or $150 of new senior notes and $350 of new subordinated notes;

• £1 million of ResCap's £65.27 million 9 7/8% notes due July 1, 2014, which were exchangeable for $200 in cash or $150 of new senior notes and $350 of new subordinated notes;

• $1.89 billion of ResCap's $4.01 billion 9 5/8% junior secured guaranteed notes due May 15, 2015, which were exchangeable for $250 in cash or $250 of new senior notes and $300 of new subordinated notes; and

• $38.73 million of ResCap's $150.96 million 8 7/8% notes due June 30, 2015, which were exchangeable for $200 in cash or $150 of new senior notes and $350 of new subordinated notes.

GMAC needed to achieve at least $30 billion of total regulatory capital to meet the Federal Reserve's requirements for it to become a bank holding company.

Previously, the company said it planned to withdraw its application to become a bank holding company if it did not receive the needed amount of notes and that if it were 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.

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

GMAC is a Detroit-based diversified financial services company.

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