Ally Financial Inc. had sought to repay a US bailout by raising a total of USD1 billion through a private placement. The auto lender company also said to buy back more than USD5 million of preferred shares which were held by the Treasury Department.
The move was intended to boost the company's finances as it resubmits its capital plans to regulators. This was according to a statement released by Detroit-based Ally today. The said deal included the termination of the existing share adjustment right of the US Treasury.
The terms of the deal included paying the US Treasury USD5.2 billion. The payment was for the reacquisition of USD5.94 billion par value of convertible preferred shares. The other payment, priced USD725 million, was for the termination of the share adjustment right.
The agreement awaits regulatory approvals to approve Ally's modified capital plan. The funding of the private placement would take place November 30.
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