Magazine article American Banker

GMAC Commercial a Done Deal

Magazine article American Banker

GMAC Commercial a Done Deal

Article excerpt

An investor group led by Kohlberg Kravis Roberts & Co., Five Mile Capital Partners LLC, and Goldman Sachs Capital Partners finally closed its deal for a majority stake in General Motors Corp.'s commercial real estate business.

The group, which originally said it would buy 60% of the unit, said Thursday that it had actually bought 78%, though the unit's management team then bought a 4% stake from the group and the automaker's finance arm, General Motors Acceptance Corp. (The investor group was left with a 75% stake, and GMAC with 21%.)

GMAC said that it received $1.5 billion in cash for the stake in GMAC Commercial Holding Corp. Also, the commercial unit repaid about $7.3 billion of intercompany loans to GMAC.

Michael Stoller, a GMAC spokesman, said that it will redirect the capital to its other businesses. He would not say whether GMAC would boost its dividend to its parent. GMAC paid $2.5 billion of dividends to GM last year.

The commercial lender changed its name to Capmark Financial Group Inc., a name derived from a company it purchased in 2003.

Standard & Poor's Corp. gave Capmark's debt its lowest investment-grade rating, BBB-minus, and Moody's Investors Service Inc. gave it the equivalent rating of Baa3. Fitch Inc. rated the lender a notch higher, at BBB.

GM is still seeking a buyer for a controlling interest in GMAC, to help the finance arm get an investment grade rating.

Capmark appointed Dennis Dammerman, a former vice chairman of General Electric Co. …

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