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Friday, January 02, 2009
Government to Get 5M Preferred GMAC Shares
Associated Press
DETROIT--The federal government will get 5 million preferred shares of GMAC LLC paying 8% interest in exchange for its $5 billion capital injection to help the troubled lender avoid bankruptcy.
GMAC disclosed the terms of the deal in a filing Friday with the U.S. Securities and Exchange Commission. GMAC is the financial arm of General Motors Corp. and is responsible for making car loans and financing dealer inventories.
The U.S. Treasury will get 8 percent interest on the shares. The government also exercised a 10-year warrant to buy 250,000 more GMAC preferred shares for a penny each.
GMAC is 49% owned by GM and 51% owned by private equity firm Cerberus Capital Management LP.
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