GMAC LLC, the auto and home lender trying to rescue itself by becoming a bank holding company, scrambled to line up more support for a $38 billion debt swap as some of its biggest investors continued to balk, Bloomberg reported.
Pacific Investment Management Co., which manages the world's biggest bond fund, failed to tender its holdings, according to people familiar with the negotiations. Pimco earlier agreed to participate along with the rest of a bondholder committee that sought better terms, said the people, who declined to be identified because talks were private.
GMAC remains short of the 75 percent participation needed to help qualify as a bank holding company and obtain federal aid. Holders of $16.9 billion, or 58 percent, of eligible GMAC notes and $3.5 billion, or 38 percent, of securities issued by its Residential Capital LLC mortgage unit had tendered by the end of yesterday, GMAC said in a federal filing today. The deadline for early delivery is tomorrow.
"We're disappointed with the follow-through participation through yesterday," said GMAC spokeswoman Gina Proia, in an interview. "However, we're hopeful we can still achieve the needed participation to meet the capital requirement by Friday."
GMAC, the primary lender to General Motors Corp. dealers, sweetened terms of the debt swap last week and has extended the deadline five times since announcing the deal in November. The exchange is part of Detroit-based GMAC's plan to cut debt and amass $30 billion in regulatory capital demanded by the Federal Reserve.