Deliver Your News to the World

GMAC Makes Final Amendments to the Exchange Offers After Reaching Agreement With a Substantial Portion of Bondholders


WEBWIRE

Extends the early delivery time to Tuesday, December 16


NEW YORK.- GMAC Financial Services (GMAC) today announced that it has amended and extended its separate private exchange offers and cash tender offers to purchase and/or exchange certain of its and its subsidiaries’ (the “GMAC offers”) and Residential Capital, LLC’s (the “ResCap offers”) outstanding notes in order to reflect an agreement in principle reached with representatives of a substantial portion of the outstanding notes.

GMAC said that the amount of notes covered by the agreement in principle on the material terms of the offer represents substantial progress toward attaining the estimated overall participation that would be required to satisfy the condition for a minimum amount of regulatory capital in connection with GMAC’s application to become a bank holding company. However, significant additional participation will also be required. As previously announced, in order for such condition to be satisfied, the estimated overall participation in the offers would be required to be approximately 75% on a pro rata basis. The Federal Reserve has informed GMAC that if GMAC is unable to meet these capital requirements, it will not approve GMAC’s application to become a bank holding company.

GMAC announced that it has extended the early delivery time with respect to the offers to 5:00 p.m., New York City time, on December 16, 2008 and extended the expiration date of the offers to 11:59 p.m., New York City time, on December 26, 2008. The withdrawal deadline with respect to the offers has not been extended.

The amendments include an increase in the annual dividend rate to 9% (to be reduced to 7% after GMAC shall have raised at least $2 billion of new Tier 1 capital, $750 million of which is to be contributed by GMAC’s existing shareholders) and the addition of certain covenants relating to the new guaranteed notes, including restrictions on liens, subsidiary guarantees and asset sales.

To date, approximately $6.8 billion in aggregate principal amount (or 24%) of the outstanding GMAC old notes have been tendered in the GMAC offers and approximately $2.4 billion in aggregate principal amount (or 25%) of the outstanding ResCap old notes have been tendered in the ResCap offers. These results do not include the notes covered by the agreement in principle.

GMAC intends to distribute supplements to the confidential offering memoranda previously distributed with respect to the GMAC and ResCap offers, containing the complete final amendments to the terms and conditions of the GMAC and ResCap offers.

Global Bondholder Services Corporation, the information agent for the offers, is available to assist investors with questions regarding the tender and exchange process or other logistical issues, at (866) 794-2200 (U.S. Toll- free). Documents relating to the offers will only be distributed to holders of the old notes who complete and return a letter of eligibility confirming that they are within the category of eligible investors for this private offer. Noteholders who desire to obtain a copy of the eligibility letter should also contact Global Bondholder Services Corporation.

The securities to be issued in the GMAC offers and the ResCap offers will not be registered under the Securities Act of 1933, as amended (the “Securities Act”), or any securities laws and, unless so registered, such securities may not be offered, sold, pledged or otherwise transferred within the United States or to or for the account of any U.S. person, except pursuant to an exemption from the registration requirements thereof.

Accordingly, the GMAC offers are being made only (i) in the United States, to persons who are both “qualified institutional buyers,” as that term is defined in Rule 144A under the Securities Act (“QIBs”) and “qualified purchasers” (as defined in the GMAC offering memorandum) or (ii) outside the United States, to persons who are not “U.S. persons,” as that term is defined in Rule 902 under the Securities Act and who are also both “non-U.S. qualified offerees” and “qualified purchasers” (each as defined in the GMAC offering memorandum). The ResCap offers are being made only to (i) in the United States, QIBs, or (ii) outside the United States, persons who are not “U.S. persons,” and who are “non-U.S. qualified offerees.”

Cautionary Statement
This press release is for informational purposes only and does not constitute an offer to sell or the solicitation of an offer to buy any security and shall not constitute an offer, solicitation or sale of any securities in any jurisdiction in which such offering, solicitation or sale would be unlawful. The GMAC and ResCap offers are only being made pursuant to the applicable offering memoranda and the related letters of transmittal that GMAC is distributing to eligible holders of the GMAC old notes and ResCap old notes. The GMAC and ResCap offers are not being made to holders of the GMAC old notes or the ResCap old notes in any jurisdiction in which the making or acceptance thereof would not be in compliance with the securities, blue sky or other laws of such jurisdiction. In any jurisdiction in which the securities laws or blue sky laws require the GMAC or ResCap offers to be made by a licensed broker or dealer, the GMAC and ResCap offers will be deemed to be made on behalf of GMAC by one or more of the dealer managers, or one or more registered brokers or dealers that are licensed under the laws of such jurisdiction.



WebWireID82544





This news content was configured by WebWire editorial staff. Linking is permitted.

News Release Distribution and Press Release Distribution Services Provided by WebWire.