Ally files for IPO in U.S.
Ally Financial made its first move towards public ownership Thursday with the filing of initial public offering papers with U.S. regulators.
The former General Motors captive hopes to raise as much as $100 million with the IPO.
According to Reuters News Agency, the U.S. Treasury said in a statement it agreed to be named as a selling shareholder of Ally's common stock while retaining the right to decide whether to participate in the IPO.
The U.S government spent over $17 billion saving Ally, formally GMAC, during the Great Recession after mortgage loans crippled the financial institution. News reports say the Treasury has recovered nearly $5 billon through repayments and dividends thus far. The federal agency maintains a 74 per cent state in Ally.
“The timing and the size of the proposed offering have not yet been determined,” a spokeswoman for Ally told Reuters, adding that neither the numbers of shares nor a price range was disclosed in the filing.
Joint global coordinators include Goldman, Sachs & Co., Citigroup Global Markets Inc., J.P. Morgan Securities LLC, and Morgan Stanley & Co.
News of the IPO filing comes after Ally revealed earlier this week that it had wrapped up approximately $15 billion in credit facilities at both the parent company and at its banking subsidiary, Ally Bank, with a syndicate of 21 lenders.
According to the company, the secured facilities could now be used in Canada for floorplan, retail and lease financing.
“The new facilities are part of our diversified funding strategy and offer additional liquidity to support key areas of the automotive finance business,” said Ally treasurer Jeffrey Brown. “Continued progress in Ally's business performance coupled with favourable market conditions enabled us to refinance these key facilities at more favourable terms compared to prior years.”
The $15 billion funding capacity is comprised of two $7.5 billion facilities, one of which is available to the parent company, Ally Financial, and one of its Canadian subsidiaries, and the other which is available to Ally Bank. Each new facility will have half the capacity maturing in two years and the other half maturing in 364 days.
The two credit lines replace facilities at both Ally Financial and Ally Bank that were due to mature in the second quarter of 2011.
