Ally Financial is in discussions with private investors to raise capital that would help the once-troubled lender clear the Federal Reserve's capital bar, according to people familiar with the matter.
The company is marketing a $1 billion stock sale to some 30 investors and the deal is likely to take place in the next week, these people said. Alternative asset managers, including large Ally shareholder Cerberus Capital Management, are expected to snap up the shares.
During the Fed's stress tests early this year, questions were raised about a handful of banks' risk-modeling processes—but Ally was the only company not to clear a capital hurdle. It posted a 1.5 percent capital level, where 5 percent was the minimum, indicating that Ally would not have enough liquidity to absorb its own losses in another financial crisis.
The biggest overhang to Ally's capital position was removed in May, people familiar with the situation said, when it agreed to pay $2.1 billion to settle claims stemming from the bankruptcy of its subprime mortgage unit, Residential Capital.
In previous rounds of the stress test, the Fed had placed a large estimate on Ally's losses associated with the ResCap litigation, people familiar with the matter said. Resolving the issue through the settlement removed a large overhang for future stress tests.
(Read more: Rising interest rates focus for bank stress tests)