GMAC Financial Services has confirmed that it is in discussions with federal regulatory authorities regarding seeking bank holding company status.
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“As a bank holding company, GMAC would obtain increased flexibility and stability to fulfill its core mission of providing automotive and mortgage financing to consumers and businesses,” a statement from the company said.
GMAC said it also expects to have expanded opportunities for funding and for access to capital as a bank holding company.
In connection with this initiative, GMAC said it was also considering raising and maintaining significant amounts of additional capital to meet regulatory requirements related to bank holding company status.
In this regard, GMAC intends to commence a private offer to exchange a significant amount of its outstanding indebtedness for a reduced principal amount of new indebtedness. Details of this offering will be disclosed in the near future, the company said.
“The benefits of this type of restructuring would allow us to put additional capital and liquidity resources immediately to work in financing consumers and automotive dealers,” said GMAC chief executive officer Alvaro de Molina.
Earlier this week, GMAC announced it was to considerably scale back its European automotive finance business. The company said in a statement that the move was “part of a strategic approach to manage resources during this time of significant capital and credit market disruption.”
The actions include ceasing retail originations in Czech Republic, Finland, Greece, Norway, Portugal, Slovak Republic and Spain. The move will become effective from November.
GMAC is also pulling out of retail and wholesale vehicle financing in Australia and New Zealand.
