ResCap wraps exchange offers, cash tender for $14 billion of notes

By Jennifer Chiou

New York, June 4 - Residential Capital, LLC (ResCap) announced the completion of its exchange offers and consent solicitations for $12.8 billion of its outstanding notes as well as its cash tender offer and consent solicitation for all its $1.2 billion outstanding principal amount of floating-rate notes due June 9, 2008.

The offers expired at 9 a.m. ET on June 4, pushed back from 11:59 p.m. ET on June 3.

Plans for the offers were first announced on May 2. They began on May 5.

The exchange offers applied to $398.85 million of floating-rate notes due 2008, $684.01 million of 8 1/8% notes due 2008, $714 million of floating-rate notes due April 2009, $949 million of floating-rate notes due May 2009 and $576.96 million of floating-rate subordinated notes due 2009.

They also applied to $2.15 billion of 8 3/8% notes due 2010, €542.8 million of floating-rate notes due 2010, $1.24 billion of 8% notes due 2011, €550 million of 7 1/8% notes due 2012, $928.5 million of 8½% notes due 2012, $1.6 billion of 8½% notes due 2013, £348.92 million of 8 3/8% notes due 2013, £363 million of 9 7/8% notes due 2014 and $486.5 million of 8 7/8% notes due 2015.

At the end of the offer, about $2.6 billion, or 80%, of the old notes that mature in 2008-2009 had been tendered and about dollar equivalent $6.0 billion, or 63%, of the old notes that are due in 2010-2015 had been validly tendered, unchanged from May 21.

ResCap said it received tenders for:

• $287.17 million, or 72%, of the floaters due 2008, of which $110.87 million of notes were tendered for exchange only;

• $521.28 million, or 76.2%, of its 8 1/8% notes, of which $175.73 million of notes were tendered for exchange only;

• $651.45 million, or 91.2%, of the floaters due April 2009, of which $331.81 million of notes were tendered for exchange only;

• $817.41 million, or 86.1%, of the floaters due May 2009, of which $266.74 million of notes were tendered for exchange only; and

• $371.51 million, or 64.4%, of the subordinated floaters due 2009, of which $183.81 million of notes were tendered for exchange only.

The company also received tenders for:

• $901.60 million, or 41.8%, of the 8 3/8% notes due 2010, of which $437.32 million of notes were tendered for exchange only;

• €181.82 million, or 33.5%, of the floaters due 2010, of which €23.85 million of notes were tendered for exchange only;

• $1.03 billion, or 82.5%, of the 8% notes, of which $728.20 million of notes were tendered for exchange only;

• €439.1 million, or 79.8%, of the 7 1/8% notes, of which €256.39 million of notes were tendered for exchange only;

• $833.53 million, or 89.8%, of the 8½% notes due 2012, of which $530.37 million of notes were tendered for exchange only;

• $729.67 million, or 45.5%, of its 8½% notes due 2013, of which $549.52 million of notes were tendered for exchange only;

• £308.17 million, or 88.3%, of the 8 3/8% notes due 2013, of which £119.91 million of notes were tendered for exchange only;

• £297.73 million, or 82%, of the 9 7/8% notes, of which £69.31 million of notes were tendered for exchange only; and

• $335.55 million, or 69%, of the 8 7/8% notes, of which $291.19 million of notes were tendered for exchange only.

In addition, $853.4 million of floaters due June 9, 2008 were tendered for cash, unchanged from the early deadline.

ResCap will issue 8½% senior secured guaranteed notes due 2010 in exchange for old notes maturing in 2008 and 2009 and 9 5/8% junior secured guaranteed notes due 2015 for old notes maturing in 2010 through 2015.

As previously announced, ResCap received the requisite consents to amend the note indentures and entered into supplemental indentures.

Based upon the tenders up to May 22, about $5.7 billion of new notes would be issued in exchange for old notes.

As already reported, one-third of the original principal amount of the 9 5/8% new notes will be mandatorily redeemable on each of May 15, 2013 and May 15, 2014. The rest will be payable at maturity.

The new notes will be guaranteed by subsidiaries of ResCap and secured by a security interest in ResCap's assets.

For each $1,000 principal amount of notes due 2008 tendered by the early tender deadline, 5 p.m. ET on May 16, holders will receive $1,000 principal amount of new notes.

For each $1,000 principal amount of notes due April 2009 or May 2009 tendered by the early deadline, holders will receive $900 principal amount of new notes.

For each of the other series, holders will receive $800 principal amount of new notes for each $1,000 principal amount of notes tendered by the early deadline.

For notes tendered after the early deadline, the principal amount of new notes will be decreased by $30 for each $1,000 principal amount of old notes.

Holders of tendered notes will receive accrued interest to but excluding the settlement date.

Holders may opt for Dutch auction

The company previously said that participating holders could also choose to receive cash instead of the new notes through the modified Dutch auction.

Each holder that chose to receive cash was asked to submit a minimum price that the holder wanted to receive for the old notes. For each $1,000 principal amount, the offered prices had to be at least $850 for notes maturing in 2008 and 2009 and at least $650 for notes maturing in 2010 through 2015. The offered prices could not be more than $1,000 per $1,000 principal amount of any of the old notes.

Holders will receive new notes in exchange for old notes that are submitted but not accepted in the auction.

Tender for June 2008 notes

ResCap will pay $1,000 for each $1,000 principal amount of its floating-rate notes due June 9, 2008 that were tendered by 5 p.m. ET on May 16.

Notes tendered after that early deadline but before the tender expiration will receive $970 per $1,000 principal amount.

Holders will also receive accrued interest for the notes.

Consents sought to amend notes

In connection will all of the offers, ResCap solicited consents to amend the indentures for the old notes.

The proposed amendments will release the subsidiary guarantees of ResCap's obligations under the old notes. They will also eliminate some of the restrictive covenants and events of default.

Issuance of the new notes did not require approval of the amendments, so the exchange offers did not depend on the outcome of the consent solicitations.

Settlement of the offers depended on other conditions, including ResCap's entering into a new first-lien senior secured credit facility providing for at least $3.5 billion. ResCap previously said it was in negotiations with parent GMAC LLC for such a facility.

Global Bondholder Services Corp. (866 470-3800 or 212 925-1630) was the information agent.

ResCap is the Minneapolis-based mortgage lending unit of General Motors Acceptance Corp.

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