In one of the largest refinancings ever, GMAC said that it had completed a more than $60 billion rescue effort to improve the liquidity of its struggling subsidiary, mortgage lender Residential Capital.
To get the cash it needed, ResCap had offered to exchange or tender $14 billion in outstanding bonds, of which bondholders agreed to exchange $8.6 billion.
ResCap extended the maturities by one year on all of its bilateral bank facilities totaling $11.6 billion and obtained a new $2.5 billion syndicated whole loan repurchase facility.
Additionally, GMAC provided a $3.5 billion two-year credit facility to ResCap, which includes $750 million of first-loss protection from parents General Motors and Cerberus. GMAC obtained a syndicated $11.4 billion revolver with a three-year maturity and renewed a $10 billion one-year, syndicated commercial facility.
More than 50 institutions worldwide participated in the refinancing. The syndicated loan facilities were led by JPMorgan, Citigroup, Bank of America and the Royal Bank of Scotland. The ResCap bond exchange and cash tender offers were led by BofA and Citi.
As of the expiration of the debt exchange Wednesday, roughly $2.6 billion in notes set to mature in 2008 to 2009 and approximately $6 billion in notes set to mature in 2010 to 2015 had been tendered. Based on these results, approximately $1.7 billion of new 8.5% senior secured notes due 2010 will be issued in exchange for the old 2008 to 2009 notes, and roughly $4 billion of new 9.625% junior secured notes due 2015 will be issued in exchange for the old 2010 to 2015 notes.