GMAC Financial Services Inc. is in close talks with the federal government for an additional tranche of bailout funding, according to the Wall Street Journal. If approved, the decision would make the company the first to receive three separate support packages.
The auto lender will likely get between $2.8 billion and $5.6 billion, company officials told the paper, for which it would trade preferred stock. Since GMAC has received $12.5 billion in bailout assistance.
As the lead wholesale lender for General Motors dealerships, the company has struggled alongside the rest of the auto industry. At the height of the financial crisis last year, it received regulatory approval to transform into a bank holding company, thus making it eligible for assistance under the Troubled Asset Relief Program.
GMAC's involvement in the bailout also subjected it to the Treasury Department's stress tests, which determined the company required an additional $11.5 billion to maintain adequate capital levels.
In addition to making a large capital injection, the government also plans to offer GMAC $2.9 billion in additional loan guarantees, the Journal reported. The Federal Deposit Insurance Corp. has already backed $4.5 billion in GMAC-issued debt this year.
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