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 and
GM Keeps GMAC On The Block by Joseph Szczesny
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
A slimmer face for a sleek Euro beater.
Chrysler Turns Tables on Litigators
a classic turnaround, DaimlerChrysler has demanded disbarment of a
to DaimlerChrysler lawyer Steven B. Hantler, "Our company was the victim of one
of the most outrageous examples of lawyer misconduct in