General Motors Acceptance Corp. bought its way into the commercial lending market last week, agreeing to pay $1.8 billion for the commercial finance unit of the Bank of New York.

It marks yet another expansion for GMAC, which has spent the past year, and some big coin, on adding to its burgeoning automotive financing operations. It will pay cash for BNY Financial Corp., the commercial lending subsidiary of the bank, which will now focuses on the servicing side of the business.

"[This deal] will provide GMAC with a solid platform to become an industry leader in commercial finance," GMAC Chairman John Finnegan said of the newly-christened GMAC Commercial Credit Corp. The financing arm for carmaker General Motors also bought residential mortgage lender RFC in 1998, its first attempt to move beyond car loans and leasing.

GMAC pulled out the wallet with plans to snap up home equity player ContiFinancial Corp. last month, but it's not known where negotiations are right now. One analyst said Conti "looks like a good fit" for GMAC's expansionary plans. "It's one of the better home equity shops out there."

But last week, Conti agreed to sell its smaller automotive financing operations to Triad Financial Corp., a division of Ford Credit.

Sources at GMAC have said it's not known yet what kind of asset-backed issuance will come out of the deal, but it is certainly a matter of when and not if. "It's a key funding source for us, one we do well and one we do with every other operation," said the source.

Best guesses on when a GMAC commercial lending deal will hit the market have early 2000 as targets. Plans are for BNY Financial's chairman and CEO Joe Grimaldi to stay on as head of the firm, and all employees are expected to remain on board.

Earlier this month, rumors had BONY looking for a lead to bring a commercial lending deal to market, but those plans appeared to have been waylaid by the buyout talks. - TC

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