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Monday, December 29, 2008

GMAC Bailout

by Calculated Risk on 12/29/2008 10:08:00 PM

From the WSJ: U.S. Deepens Involvement With GMAC Move

The U.S. government Monday deepened its involvement in the U.S. automotive industry by committing $6 billion to stabilize GMACLLC, a financing company vital to the future of struggling carmaker General MotorsCorp.

In a sign that the government's role in the industry could become open ended, Treasury said late Monday it had set up a separate program within the Troubled Asset Relief Program, a fund originally designed to help banks, to make investments directed at the auto industry. A Treasury official said the new program didn't have a specific dollar limit.

In Monday's move, the Treasury said it purchased $5 billion in senior preferred equity in GMAC and offered a new $1 billion loan to General Motors so that the automaker could participate in a rights offering at GMAC. That loan comes in addition to the recent $17.4 billion emergency plan to rescue General Motors and Chrysler LLC.
The bailout expands ...