Positions company to repay U.S. taxpayer over time
DETROIT (Dec. 30, 2010) -- Ally Financial Inc. (Ally) today announced that the U.S. Department of the Treasury has converted $5.5 billion of Ally Mandatorily Convertible Preferred (MCP) stock held by Treasury into common stock.
"The conversion of the MCP stock to common stock better positions Ally to execute its plan to repay the U.S. taxpayer over time," said Ally Chief Executive Officer Michael A. Carpenter. "The company has made significant progress in transforming its operations and restoring financial performance this year. The next logical step in our strategic plan was to begin to conform the capital structure to that more typical of a bank holding company, and the conversion of these shares is a key milestone in that effort."
As a result of the conversion and consequent reduction of the equity interests held by General Motors and the GM Trust, the Federal Reserve has determined that GM will no longer be considered an "affiliate" of Ally's retail bank Ally Bank for purposes of Sections 23A and 23B of the Federal Reserve Act, which imposes limitations on transactions between banks and their affiliates. Transactions between Ally Bank and GM will continue to be subject to regulation and examination by the bank's primary federal regulator, the Federal Deposit Insurance Corporation.
Following the conversion of the MCP stock, Treasury holds approximately 73.8 percent of Ally's common stock. Ally's remaining common stock is held as follows: Cerberus and affiliates 8.9 percent, third party investors 7.4 percent, General Motors Trust 5.9 percent and General Motors 4.0 percent.
About Ally Financial Inc.
Ally Financial Inc. (formerly GMAC Inc.) is one of the world's largest automotive financial services companies. The company offers a full suite of automotive financing products and services in key markets around the world. Ally's other business units include mortgage operations and commercial finance, and the company's subsidiary, Ally Bank, offers online retail banking products. With more than $173 billion in assets as of Sept. 30, 2010, Ally operates as a bank holding company. For more information, visit the Ally media site at http://media.ally.com.