GM, Cerberus Seek Bank Status For GMAC

GMAC, the troubled auto finance and home-loan lender, is reportedly in discussions with the Federal Reserve to become a bank holding company so that it can help its co-owners General Motors and Cerberus gain access to the U.S. Treasury’s $700 billion financial rescue plan. (WSJ)

As part of the deal, General Motors would have to transfer at least half of its 49% stake in GMAC to Cerberus, which controls the remaining 51% of voting shares. Cerberus could then swap part of its 80% stake in Chrysler for the larger share of GMAC.

GMAC also said Tuesday it received approval to access the Federal Reserve’s new commercial paper facility.  The lender plans to sell investment grade short-term debt to the Federal Reserve through its New Center Asset Trust unit, which has the capacity to issue $10 billion worth of asset-backed commercial paper. Ford Motor Credit, the finance arm of Ford Motor, also gained access to the facility.

Separately, GMAC announced it will halt new vehicle loans in seven European countries as credit markets deteriorate.

Sources:

GMAC Seeks Access To Bank Bailout Funds (WSJ)

GMAC Says Fed Grants Access To Commercial-Paper Plan (Bloomberg)

GMAC, Ford Arm to Get Help On Commercial-Credit Access (WSJ)

GMAC Unit Ends Auto Loans In Seven European Countries (Bloomberg)

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