The Treasury Department unveiled plans on Tuesday to begin unloading the $2.7 billion of trust preferred securities it received from Ally Financial, the former financial arm of General Motors (NYSE:GM).
Ally, formerly known as GMAC, received a total bailout of about $17.2 billion during the financial crisis. It’s not clear how much of the trust preferred securities the Treasury plans to sell, or when the sale will take place. Proceeds raised from the sale of the securities, which were received in 2009, would represent a “partial recovery” on the government’s investment, the Treasury said.
Citigroup (NYSE:C), Deutsche Bank (NYSE:DB), JPMorgan Chase (NYSE:JPM) and Morgan Stanley (NYSE:MS) are set to act as joint lead managers for the offering, which is part of the U.S.’s plan to make Ally independent.
The sale announced Tuesday does not include the Treasury’s $5.9 billion of mandatory convertible preferred stock in Ally or any of the U.S.’s 74% stake in Ally’s common stock.
Ally is expected to make an initial public offering later in 2011.