Ally Financial Inc, the auto and mortgage lender majority-owned by the U.S. government, has selected four U.S. banks to lead a planned initial public offering, according to sources familiar with the situation.
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Ally, formerly known as GMAC, said previously it planned an IPO this year, and sources have said it could top $5 billion.
Ally and all four banks declined to comment. The U.S. Treasury were not immediately available for comment on the news first reported by the New York Times.
The sources wished to remain anonymous because the choice of underwriters has not been made public.
Bad mortgage loans forced taxpayers to bail out Ally multiple times in 2008 and 2009 with more than $17 billion of cash injections.
But the lender has been turning around its operations. Earlier this month, Ally posted its fourth consecutive quarterly profit.In December, the government agreed to convert $5.5 billion of its Ally preferred shares into common stock, taking a 73.8% stake in the lender.
The offering will help the government sell some of its shares in Ally and begin to exit its investment in the company, and follows similar moves by a series of other companies bailed out during the financial crisis.
Automaker General Motors Co (NYSE:GM) went public in a record-setting $23.1 billion IPO in November and American International Group Inc (NYSE:AIG) is preparing for a roughly $15 billion share sale in the first half of this year.
Several major Wall Street banks pitched for the lead underwriting role last week, other sources familiar with the situation said.
Citigroup and Goldman have been advising Ally on its restructuring over the last several months.The Treasury is being advised by Perella Weinberg Partners in the sale of its stake in Ally.