UPDATE: GMAC CFO: Want To Regain Share In GM Retail Sales
05 Mai 2009 - 5:25PM
Dow Jones News
GMAC LLC said Tuesday it wants its share of financing of General
Motors Corp. (GM) vehicles to return to levels seen before the
credit crisis.
"We hope to get back to where we were before," Robert Hull,
GMAC's chief financial officer, said during a conference call with
analysts and investors discussing the lender's first-quarter
results.
Hull declined to provide guidance around future financing
levels.
GMAC, the financing arm affiliated with GM, funded 17% of the
auto maker's retail sales in the first quarter, compared with 49% a
year earlier. GMAC funded 32% of the auto maker's retail sales in
2008 and provided 81% of the financing to GM dealers.
Hull also didn't rule out the re-entry of GMAC in the leasing
market. "If there's a way we can make leasing work, we will," he
said. GMAC ceased financing leases after lower used car values
forced the lender to take a $1.2 billion impairment charge on its
operating lease portfolio last year.
On a separate note, Hull said GMAC could meet its 2009 debt
maturities without government funds "if necessary." But, he added,
this may result in "brakes" on lending volume.
More than four months after turning itself into a bank, GMAC is
still waiting for the green light from the Federal Deposit
Insurance Corp. to sell cheaply priced debt insured by the FDIC as
part the Temporary Liquidity Guarantee Program.
GMAC has $30.6 billion of debt maturing in 2009, including $11.8
billion of unsecured debt. Gaining access to cheap capital through
the TLGP was a major driving force behind the cash-strapped
lender's bank registration in December.
Hull said GMAC could issue less than $10 billion and more than
$5 billion under TLGP. This amount is less than what the company
estimated if it had received the go-ahead earlier from the FDIC.
The reduced amount stems from TLGP guidelines related to the debt
maturities of a company. The guidelines dictate how much debt a
company can issue under the plan.
Early Tuesday, GMAC posted a first quarter loss of $675 million,
aided by a $631 million gain from extinguishing debt. But without
this gain, GMAC's loss totaled about $1.3 billion.
GMAC is jointly owned by GM and an investor group led by
private-equity firm Cerberus Capital Management LP. The auto maker
and the investor group will significantly scale back their
ownership in GMAC as a condition of the lender becoming a
bank-holding company in December.
-By Aparajita Saha-Bubna, Dow Jones Newswires; 617-654-6729;
aparajita.saha-bubna@dowjones.com