From the November 2008 issue of Treasury & Risk magazine

Bronze AHA Award Winner in Corporate Finance

A major global refinancing in the summer of 2008 is a feat to consider. GMAC LLC pulled it off, in one of the stingiest credit and capital markets in history. The big mortgage and car financing company that provides auto loans for General Motors needed to ensure adequate access to liquidity for all its businesses, including mortgage subsidiary Residential Capital. Both GMAC and ResCap, as it is known, had various credit facilities set to mature this past July. ResCap had a significant amount of unsecured debt maturing this year, as well. "The plan was to execute initiatives to improve financial flexibility during one of the toughest market cycles by extending maturities at ResCap and modifying existing credit lines at GMAC and ResCap, thereby removing near-term refinancing risk and providing additional sources of funding," says Sam Ramsey, GMAC chief risk officer.

GMAC executed a comprehensive series of transactions, which included extending key bank facilities, increasing the amount of available funding and further enhancing liquidity positions. A key part was a new, globally syndicated $11.4 billion secured revolving credit facility with a three-year maturity. GMAC also renewed a one-year, syndicated commercial paper back-up facility providing another $10 billion. Altogether, the company tallied $60 billion of refinanced debt, making it one of the largest ever completed. "The global refinancing was key and critical at the time and was completed in advance of upcoming maturities," Ramsey says, noting that the project is just one of GMAC's ongoing initiatives to "prudently manage resources during a significant market disruption."

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