General Motors Acceptance Corp., the financial services unit of General Motors has agreed to sell a 60% stake in its commercial mortgage subsidiary to a private equity investor group that includes Kohlberg Kravis Roberts & Co., Five Mile Capital Partners and Goldman Sachs Capital Partners, the Associated Press (AP) reported.
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AP said GMAC will continue to hold a 40% equity interest in GMAC Commercial Holding Corp., a provider of commercial real estate loan origination, servicing, asset management, investment management and technology services. The mortgage unit has a loan servicing portfolio of about $250 billion.
According to the Associated Press, GM said the board of GMAC Commercial Holding will be composed of individuals from the investor group, GMAC and GMACCH management. Members of the current GMACCH management team also will invest in the company shortly after the transaction is completed.
In conjunction with the equity sale, GMAC Commercial Holding will seek to obtain a standalone credit rating to help fund operations on an ongoing basis. Under terms of the transaction, the company will repay all inter-company loans to GMAC when the deal is completed, the AP report added.
The Associated Press said the sale is expected to close in the fourth quarter, subject to regulatory approvals and other conditions. The GM and GMAC boards have approved the transaction.
