GMAC Still Short of Capital to Become a Bank

Financing company GMAC said in a regulatory filing Thursday that about $16.9 billion, or 58 percent, worth of its notes have been tendered as part of a plan to swap $38 billion of debt and amass enough regulatory capital to become a bank holding company.

The total includes notes tendered through the end of Wednesday. That's about $300 million more than the $16.6 billion worth of notes tendered at end of day Tuesday, according to a filing with the Securities and Exchange Commission.

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In addition, GMAC's Residential Capital mortgage business has tendered $3.5 billion, or 38 percent, of its notes, the company said.

In order to become a bank holding company, and eligible for a slice of the federal government's $700 billion bank rescue plan, GMAC must show that it has at least $30 billion in regulatory capital. The company has said it needs about 75 percent participation on the offers in order to meet that requirement.

GMAC warned last week that failure to convert to a bank holding company would have a "material adverse effect" on its business. And some analysts have speculated that without the federal financial help, the company could be forced to file for bankruptcy protection or shut down the ResCap division, which has accounted for the bulk of its recent losses.

A failure at GMAC also could have an untold effect on its owners , which holds a 51 percent stake, and struggling Detroit automaker General Motors, which owns the rest.

Late Tuesday, GMAC extended the early delivery time for the offers until Friday, its fifth such extension. The expiration date remains Dec. 26. Bondholders that tender their old notes by Friday are eligible for payments in the form of cash or the new notes.