GMAC Wants More US Funding

For the third time in the last year, GMAC Financial Services is looking to secure US funding in an effort to raise its capital. The talks between GMAC and the US Treasury were confirmed by a White House official, who did not mention how much money GMAC is seeking. According to the Wall Street Journal, GMAC is looking to get in between $2.8 and $5.6 billion.

"GMAC is the only one of the banks that went through the stress test to need additional government capital," Treasury spokesman Andrew Williams was quoted as saying by Reuters. "All other institutions were able to raise any necessary capital from investors and several of these firms have already paid back the taxpayer."

Back in May, the aforemetioned stress test showed that GM's former financial arm needs an $11.5 billion capital increase. At the time, the lack of ways for GMAC to start raising money led to speculation that the bank holding may ask for more money... as it now does.

According to the New York Times, GMAC is the only one of the 19 banks which had to undergo the stress test which did not manage to draw private investments. The main reason is that GMAC does not have enough preferred shares to be exchanged for common equity. In addition, the second quarter of the year brought GMAC a $3.9 billion loss.

GMAC became a bank holding late last year, after parting ways with American car manufacturer GM.
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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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