Daily Edition: Mar. 24, 2006

March 22, 2006

Deal for Part of GMAC Done

General Motors Corp. said it has sold a majority interest in GMAC's commercial mortgage division in a deal valued at $9 billion, including $1.5 billion in cash. Another $7.3 billion in loans that the commercial mortgage unit owed GM were repaid at the closing.

The deal restores the commercial mortgage group's investment grade credit rating and could help GM's lagging efforts to sell off a majority interest in GMAC's remaining units, analysts suggested. The sale has been pending since August. Apparently the new buyers, which included private investors Kohlberg Kravis Roberts & Co., Five Mile Capital Partners, and Goldman Sachs Capital Partners, have been satisfied that regulators and creditors won't come hunting for them if GM is ever forced to file for court protection under Chapter 11 of the Federal Bankruptcy Code. As part of the deal, GMAC Commercial Holding also announced it has changed its name to Capmark Financial Group Inc. The new company was immediately assigned an investment-grade rating by Fitch Investment Services.

GMAC's credit rating lost its investment-grade status last year on the heels of continuing losses at GM. GM hopes selling a 51-percent stake in GMAC will both raise cash and boost the unit's credit rating back to investment grade. Analysts also said the deal was another step in the restructuring of GM, which got a boost this week when it got the green light from the United Auto Workers to offer buyouts to 126,000 union members employed by GM andDelphi. -Joe Szczesny

GM Keeps GMAC On The Block by Joseph Szczesny (3/20/2006)
Accounting issues dragging down company's Wall Street cred.

 

 

Spy Shots: '08 Cadillac STS

The Cadillac STS has a facelift in the works, likely for the 2008 model year. The big four-door gets a new, Escalade-inspired grille treatment, with a more detailed chrome treatment and a subdued mesh grille. The STS's new face looks much lighter and more expressive than the current model's - a subtle but effective update. New taillights ditch the full red lenses, in favor of styled LED lamps that complement the STS's chiseled lines.-KGP Photography

Spy Shots: '08 Cadillac STS by KGP Photography (3/23/2006)
A slimmer face for a sleek Euro beater.

 

Jaguar Sells

Browns Lane

The

Browns Lane
site that Jaguar had been seeking to sell has in fact been sold, to a company that makes manufactured buildings. Reuters reports that Jaguar, which is moving its headquarters and car museum to a new site from
Browns Lane
, did not reveal how much the site sold for. Jaguar did disclose that the new buyer will build a plant on the site for about $350 million. Browns Lane had been the site of Jaguar production since 1951; the aluminum-intensive XJ sedan and XK coupe now are built at Castle Bromwich.

 

Chrysler Turns Tables on Litigators

In a classic turnaround, DaimlerChrysler has demanded disbarment of a Texas lawyer whose reported misconduct included diddling a Dodge Neon supposedly to show its steering system was defective - in support of a bogus $2 billion product liability action.

According to DaimlerChrysler lawyer Steven B. Hantler, "Our company was the victim of one of the most outrageous examples of lawyer misconduct in Texas history. This lawyer prosecuted a lawsuit that he knew was based on fabricated evidence."

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