GMAC Improves Capital, Raises $7.1 Billion

After a very troubling 2009, financial services company GMAC seems to be back on track, as it announced last week it has managed to raise an additional $1 billion by selling retail auto loans as securities.

The latest transaction brings the total amount of money raised since September 2009 to $7.1 billion. It was achieved by GMAC's unit Ally Bank selling securities outside of a government-sponsored program, Autonews reported.

In additon, GMAC also announced earlier this month it has completed the sale of its US consumer property and casualty insurance business (including automobile, commercial vehicle, motorcycle and recreational vehicle insurance offerings) to American Capital Acquisition Corporation.

Last week, the second bond issue in 2010 allowed GMAC to raise $1.5 billion, making GMAC CEO Michael Carpenter optimistic about the outlook.

“Over time, the cost savings is very substantial. On a more than $150 billion balance sheet, some large percentage is financed by debt. You get to some big numbers quickly,” Carpenter told the source.

Earlier this week, GMAc and became the preferred provider of wholesale and retail financial services for qualified Saab dealers and customers around the world.

Last year, GMAC Financial Services announced a net loss of $5.0 billion for the fourth quarter compared to net income of $7.5 billion for the fourth quarter of 2008. For the 2009 full year, GMAC reported a net loss of $10.3 billion, as compared to a net income of $1.9 billion in 2008.

The fourth quarter and full year losses were affected by the problems related to legacy assets in the mortgage operations.
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About the author: Daniel Patrascu
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Daniel loves writing (or so he claims), and he uses this skill to offer readers a "behind the scenes" look at the automotive industry. He also enjoys talking about space exploration and robots, because in his view the only way forward for humanity is away from this planet, in metal bodies.
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