X

Thank you for sharing!

Your article was successfully shared with the contacts you provided.

(To read more on the debt and equity markets, click here.)

HORSHAM, PA-GM chairman and CEO G. Richard Wagoner announces that the auto giant is seeking a strategic partner to buy more than 50% of General Motors Acceptance Corp., which provides mortgage lending and real estate services in addition to auto financing. GMAC is the parent of locally based GMAC Commercial Holding Corp., which in August agreed to sell a 60% stake to an investor group consisting of Kohlberg Kravis Roberts & Co., Five Mile Capital Partners and Goldman Sachs Capital Partners.

Like the sale of a majority share of GMACCH, a sale of more than 50% of GMAC is driven by GMAC’s credit rating, which was downgraded along with GM to junk status earlier this year. Such a rating makes it more difficult for GMAC to borrow. In a conference call, Wagoner called the move “consistent with our strategy of maintaining the synergy between GM and GMAC and at the same time really increasing their ability to growth their business.”

Analysts, in a published report, suggest that all of GMAC would command approximately $35 billion and that a controlling stake would go for between $12 billion and $15 billion. A spokeswoman for GM tells GlobeSt.com the sale of the 60%-share of GMACCH “is expected to close before the end of the year.” Regarding the sale of its parent GMAC, she says, “We are just starting conversations with potential buyers. The process is just beginning.” She declined to identify any potential suitors.

In a report released following Wagoner’s announcement, Scott Sprinzen, a Standard & Poor’s analyst, says, “We view an investment-grade rating for GMAC as feasible, if GM sells a majority stake in GMAC to a highly rated financial institution … Absent steps to significantly limit its ownership control over GMAC, GMAC’s ratings ultimately again will be equalized to those of GM.” GMAC has approximately $300 billion worth of loans, mortgages and insurance policies in about 40 countries.

Want to continue reading?
Become a Free ALM Digital Reader.

Once you are an ALM digital member, you’ll receive:

  • Unlimited access to GlobeSt and other free ALM publications
  • Access to 15 years of GlobeSt archives
  • Your choice of GlobeSt digital newsletters and over 70 others from popular sister publications
  • 3 free articles* across the ALM subscription network every 30 days
  • Exclusive discounts on ALM events and publications

*May exclude premium content
Already have an account?

GlobeSt

Join GlobeSt

Don't miss crucial news and insights you need to make informed commercial real estate decisions. Join GlobeSt.com now!

  • Free unlimited access to GlobeSt.com's trusted and independent team of experts who provide commercial real estate owners, investors, developers, brokers and finance professionals with comprehensive coverage, analysis and best practices necessary to innovate and build business.
  • Exclusive discounts on ALM and GlobeSt events.
  • Access to other award-winning ALM websites including ThinkAdvisor.com and Law.com.

Already have an account? Sign In Now
Join GlobeSt

Copyright © 2020 ALM Media Properties, LLC. All Rights Reserved.