GMAC Raises Cap on Tender Offer for Deferred Interest Debentures Due 2012 and 2015
Sep 28, 2006
DETROIT – GMAC Financial Services today announced it will increase the maximum aggregate amount of its offer to purchase for cash its outstanding Deferred Interest Debentures due Dec. 1, 2012, and June 15, 2015 to $1 billion from the original amount of $500 million, which represents about 60 percent of the debentures outstanding. No other terms of the tender have been changed.
In addition, GMAC said that as 5:00 p.m. EDT, on Wednesday, Sept. 27, 2006, holders had validly tendered approximately $673,640,000 in Accreted Value (as defined in the Offer to Purchase) at maturity of 2012 Debentures and approximately $1,059,030,000 in Accreted Value at maturity of 2015 Debentures, representing approximately $1,037,659,200 in aggregate purchase price.
Holders who tendered by September 27, 2006 will receive the Total Consideration of $6,600 for each $10,000 of Accreted Value at maturity of the 2012 Debentures and $5,600 for each $10,000 of Accreted Value at maturity of the 2015 Debentures, including the early tender premium of $200. Holders who tender after September 27, 2006 and before midnight, EDT, on October 12, 2006, will receive the Tender Offer Consideration of $6,400 for each $10,000 of Accreted Value at maturity of the 2012 Debentures and $5,400 for each $10,000 of Accreted Value at maturity of the 2015 Debentures.
“We are pleased by the response to our initial offer,” said Sanjiv Khattri, GMAC executive vice president and chief financial officer. “Given the early strong demand we have increased the maximum to take advantage of this opportunity to reduce the level of our higher cost debt selectively.”
For complete details of the tender, holders should read the entire Offer to Purchase.
The tender offer will be financed from GMAC's existing cash portfolio. All Debentures purchased under the offers will be retired upon completion of the tenders. Payments of the tender consideration for the debentures, validly tendered and not withdrawn, on or prior to the expiration date, and accepted for purchase, will be made promptly after the expiration date. Debentures that are not tendered and accepted for payment as part of the offer will remain obligations of GMAC.
The terms and conditions of the tender offer appear in GMAC's Offer to Purchase, dated Sept. 14, 2006 . The consummation of the tender offer is conditioned on the satisfaction of customary conditions. If any of the conditions is not satisfied, GMAC is not obligated to accept for payment, purchase or pay for, or may delay, the acceptance for payment of, any tendered debentures, and may terminate the tender offer. Subject to applicable law, GMAC may waive any condition applicable to the tender offer and extend or otherwise amend the tender offer.
Questions regarding the tender offer may be directed to the dealer managers: Morgan Stanley & Co. Incorporated, at 800.624.1808 ( U.S. toll-free) or 212.761.1864 (collect); Barclays Capital Inc., at 866.307.8991 ( U.S. toll-free) or 212.412.4072 (collect); or Merrill Lynch, Pierce, Fenner & Smith Incorporated, at 888.654.8637 ( U.S. toll-free) or 212.449.4914 (collect).
Copies of the Offer to Purchase may be obtained at no charge from D.F. King & Co., Inc., the information agent at 800.859.8511( U.S. toll-free). Investors are encouraged to consult their investment advisor and/or tax professional regarding the tender offer and its opportunities.
GMAC is a global financial services company that operates in approximately 40 countries, in auto finance, residential mortgage, insurance and commercial finance businesses. With more than $300 billion in assets, it generated nearly $2.4 billion in net income in 2005, on net revenues of $19.2 billion. General Motors, which currently owns all of the equity of GMAC, announced earlier this year that it will sell a majority of its interest to a consortium of investors led by Cerberus Capital Management.
In this press release and comments by GMAC LLC (“GMAC”) management, the use of the words “expect,” “anticipate,” “estimate,” “forecast,” “initiative,” “objective,” “plan,” “goal,” “project,” “outlook,” “priorities,” “target,” “intend,” “evaluate,” “pursue,” “seek,” “may,” “would,” “could,” “should,” “believe,” “potential,” “continue,” “designed,” “impact,” or the negative of any of those words or similar expressions is intended to identify forward-looking statements. All statements herein and in related management comments, other than statements of historical fact, including without limitation, statements about future events and financial performance, are forward-looking statements that involve certain risks and uncertainties.
While these statements represent our current judgment on what the future may hold, and we believe these judgments are reasonable, these statements are not guarantees of any events or financial results, and GMAC's actual results may differ materially due to numerous important factors that are described in GMAC's most recent report on SEC Form 10-K, which may be revised or supplemented in subsequent reports on SEC Forms 10-Q and 8-K. Such factors include, among others, the following: the ability of General Motors (“GM”), our parent, to complete a transaction with a strategic investor regarding a controlling interest in GMAC while maintaining a significant stake in GMAC, securing separate credit ratings and low cost funding to sustain growth for GMAC and Residential Capital Corporation (“ResCap”) and maintaining the mutually beneficial relationship between GMAC and GM; significant changes in the competitive environment and the effect of competition in the company's markets, including on the company's pricing policies; our ability to maintain adequate financing sources; our ability to maintain an appropriate level of debt; the profitability and financial condition of GM, including changes in production or sales of GM vehicles, risks based on GM's contingent benefit guarantees and the possibility of labor strikes or work stoppages at GM or at key suppliers such as Delphi Corporation; funding obligations under GM and its subsidiaries' qualified U.S. defined benefits pension plans; restrictions on ResCap's ability to pay dividends and prepay subordinated debt obligations to us; changes in the residual value of off-lease vehicles; changes in U.S. government –sponsored mortgage programs or disruptions in the markets in which our mortgage subsidiaries operate; changes in our contractual servicing rights; costs and risks associated with litigation; changes in our accounting assumptions that may require adjustments or that result from changes in the accounting rules or their application, which could result in an impact on earnings; changes in the credit ratings of GMAC or GM; the threat of natural calamities; changes in economic conditions, currency exchange rates or political stability in the markets in which we operate; and changes in the existing or the adoption of new laws, regulations, policies or other activities of governments, agencies and similar organizations.
Investors are cautioned not to place undue reliance on forward-looking statements. GMAC undertakes no obligation to update publicly or otherwise revise any forward-looking statements, whether as a result of new information, future events or other such factors that affect the subject of these statements, except where expressly required by law.
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