GMAC LLC the auto and home lender seeking federal aid, hasn’t obtained enough capital to become a bank holding company and may abandon the effort, casting new doubt on the firm’s ability to survive. A debt exchange by GMAC and its Residential Capital LLC mortgage unit designed to bolster the company’s finances didn’t attract enough participation, GMAC said today in a statement. That leaves GMAC short of the $30 billion in regulatory capital demanded by the Federal Reserve, and the regulator won’t approve the conversion unless the goal is met, the lender said.
GMAC, the primary lender General Motors Corp. dealers, has pinned its recovery on becoming a bank and getting access to federal rescue programs. The company gave debt holders three more days to consider the exchange offer, adding that if it doesn’t complete the swap and win Fed approval by Dec. 31, “it would have a near-term material adverse effect on GMAC’s business, results of operations, and financial position.”
Read Article