Credit-firm GMAC LLC remains mum on the result of a vote by its bondholders that would enable the company to tap into billions in bailout money approved by the federal government to aid troubled financial institutions.
GMAC on Dec. 24 overcame the first hurdle when it announced its bank-holding application had been approved by the Board of Governors of the Federal Reserve System. However, a crucial Dec. 26 deadline requiring bondholders to approve the plan has come and gone, leaving the status of the bank application in doubt.
GMAC’s bondholders were asked to approve a bond-exchange program that would swap $38 billion in outstanding debt for a smaller amount of new debt and bolster capital.
Corp., which largely relies on GMAC to provide loans to dealers and customers, has said acquiring bank-holding status is essential to the auto maker’s ongoing recovery plans.
GM, which owns 49% of GMAC, has been hampered by the nation’s ongoing credit crunch that has driven customers away from showrooms and frozen funding needed by dealers to replenish their stock. Private-equity firm Cerberus Capital Management LP, which ownsLLC, controls the remaining 51% of GMAC.
“We did get approval for the bank-holding application,” GMAC spokeswoman Gina Proia confirms to Ward’s. “There has been no update from the company on the bond exchange, and as soon as we have the results we will disclose them.”
Media reports say the holdup is due to reluctance on the part of several bondholders to approve the plan.