May 20, 2009

Treasury to loan GMAC $7.5 billion

The U.S. Treasury is planning to announce a $7.5 billion loan for GMAC LLC, sources close to the deal making said Wednesday.

The Treasury's recently concluded bank stress tests concluded with the government's mandate that GMAC find $11.5 billion in additional capital to weather a potential downturn in the economy.

In December, the government loaned GMAC $5 billion with a purchase of preferred stock.

Those shares, if turned into voting stock, would give the government 35 percent of the company. Depending on how the deal is structured, the new loan could put the government in control of GMAC, the lending arm for General Motors Corp., The Detroit News reported Wednesday.

GMAC is waiting for additional government support to begin assuming the role of primary lender for Chrysler Financial, the News said.

GMAC spokeswoman Gina Proia said Tuesday the company was still discussing how much support it required from the government.

The company plans to file a financial plan with the Chicago Federal Reserve Bank by June 8, the News said.