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
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2000 Chevrolet ImpalaEnlarge Photo
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Chrysler Turns Tables on Litigators
a classic turnaround, DaimlerChrysler has demanded disbarment of a
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of the most outrageous examples of lawyer misconduct in