Confirming earlier reports, the United States Treasury Department has given GMAC another $7.5 billion in emergency loans. The latest round of bailout money is expected to go towards the financing of General Motors and Chrysler vehicles as well as shore up some of the company’s capital shortfalls.
About $4 billion of that loan will go toward vehicle financing while the remaining $3.5 billion will help the lending firm cover some of its capital shortages. The federal government ordered GMAC to secure $9.1 billion in new capital earlier this month to cover its shortages, but it remains unclear where the remaining $5.6 billion will come from.
The Treasury’s latest investment will not give it a common equity stake in GMAC, but a previous loan of $884 million could. The Treasury says it will exercise an option to transfer its $884 million loan to GM into common equity in GMAC “in the very near futureâ€, according to Automotive News. That loan should give the Treasury a 35.4 percent stake in the lending firm.
The latest loan comes on top of the Treasury’s $5 billion loan back in December.
