GMAC to Get Fresh Bailout Bucks to Finance Chrysler Sales; ChryCo Finance Merger?
In a surprise, almost off-hand announcement, President Obama told the nation that GMAC will finance Chrysler wholesale (dealer) and retail (customer) sales, as the ailing automaker enters Chapter 11. Obama promised “fresh financing” for GMAC to do the deal. Not Chrysler Finance. The remark adds substance to rumors that the Presidential Task Force on Automobiles (PTFOA) will arrange a shotgun wedding between Chrysler Financial and GMAC, despite objections from the FDIC and the Fed. For some reason, Obama forgot to mention either the merger or the amount of Uncle Sam’s contribution to GMAC that will be needed to back up the PTFOA’s decision not to throw Chrysler into liquidation. Yet. Meanwhile, Obama reiterated his promise to stand behind ChryCo customers with a federal warranty program, details of which are still notable by their absence.
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I read the story, but still very confused? Whiskey tango foxtrot
This is possibly a good sign. Hopefully this means that Chrysler Financial will be left to die on its own, with no more bailouts, now that it isn't needed for car or floorplan loans anymore. "Fact: bonds are SECURED LOANS not speculation." This is wrong on two levels. 1) Bonds are unsecured loans. 2) Secured loans can very well be speculation. Many of Chrysler's creditors have loans secured by Chysler assets, but a regular bond is not a secured loan. More importantly, someone that makes a loan "secured" by Chrysler intellectual property, trademarks, outdated factories and other illiquid assets that are not valuable outside of Chysler is a speculator. Remember, Chysler headquarters is not even owned by Chrysler. Hell, we are in this financial crisis because of speculation on mortgages "secured" by overpriced real estate, the "safest" asset.
[...] Original post: GMAC to Get Fresh Bailout Bucks to Finance Chrysler Sales; ChryCo … [...]
It sounds like rather than marrying Chrysler Financial and GMAC, GMAC is simply picking up the contracts with NewCo/Chrysler. Cerberus and Chrysler Financial get to go stick it in their ear.