GMAC may get up to $23.8 billion for recovery

CreditSights reports that GMAC LLC may have applied for up to $6 billion in funds from the government's financial bailout program, and could potentially sell $17.5 billion in government-backed debt to sustain its viability. As it was already said last week the financial company which is owned by Cerberus Capital Management and General Motors Corp, on Wednesday gained an approval to become a bank holding company.

According to the statements of GMAC without the status of a bank holding company it would most likely sell its assets and take other extraordinary measures to fulfill its obligations. In recent five quarters GMAC which makes auto loans for GM's customers lost $7.9 billion. CreditSights analysts Richard Hofmann and Adam Steer said that their estimates show GMAC could have applied for up to about $6.3 billion under the TARP program.

In addition the company may also be eligible to sell up to $17.5 billion in bonds backed by the Federal Deposit Insurance Corp if approved to sell debt under the government's Temporary Liquidity Guarantee Program (TLGP). Issuance under the TLGP is limited to 125 percent of outstanding, unsecured debt that a company issued before Sept 30, 2008, and that matures before June 30, 2009, the analysts said.