GMAC manages to tie up $60 billion financing for mortgage unit

GMAC said on Wednesday that it had completed a refinancing package worth more than $60 billion aimed at improving the liquidity of its struggling subsidiary, the mortgage lender Residential Capital (ResCap).

The package includes refinancing outstanding, unsecured debt with new, secured bonds, as well as renewing bank credit lines and new capital injections from GMAC and private equity firm Cerberus Capital Management LP, which owns 51 per cent of Detroit-based GMAC.

"This refinancing is expected to provide GMAC and ResCap with the important liquidity and financial resources to execute our business plan," Sam Ramsey, chief risk officer at GMAC, said in a statement

As part of the refinancing, GMAC obtained a new $11.4 billion secured, three-year revolving credit facility, and a renewed a $10 billion, one-year commercial paper back-up facility.

ResCap also extended "substantially all" of its bilateral bank facility, totaling around $11.6 billion, and obtained a new $2.5 billion whole loan repurchase facility. In addition, the company completed tenders and exchanges of its bonds, totaling $14 billion.

As part of the overall plan, ResCap offered to exchange as much as the $14 billion in debt to extend the dates on which the notes came due. Bondholders participating in the exchange offer will get new debt at higher interest rates, which ResCap will have longer to pay back.