ResCap: Can You Spare Another $2 Billion?
ResCap said it needs more than three times more cash to stay in business than it estimated just weeks ago.
ResCap estimates it now needs about $2 billion in cash by the end of June to meet liquidity demands.
GMAC and Cerberus Capital Management said they had agreed to inject more than $1.4 billion to help the struggling mortgage lender ResCap avoid running short of cash.
ResCap will sell a wide variety of assets to GMAC and Cerberus, including its resort funding division.
GMAC will acquire the resort funding business for an initial price of 90% of the businesses book value.
Cerberus will purchase ResCap model home assets with a value of about $475 million as part of the asset sale.
Cerberus will also purchase an additional $300 million of mortgages and mortgage-backed securities.
The mortgage lender is also in the midst of a debt exchange program that will help extend the maturity, or exchange for cash, debt totaling about $14 billion.
About $12.8 billion of debt will be exchanged, for new, long-term debt. Another $1.2 billion will be exchanged for cash.
Hattip to Bloomberg.
ResCap estimates it now needs about $2 billion in cash by the end of June to meet liquidity demands.
GMAC and Cerberus Capital Management said they had agreed to inject more than $1.4 billion to help the struggling mortgage lender ResCap avoid running short of cash.
ResCap will sell a wide variety of assets to GMAC and Cerberus, including its resort funding division.
GMAC will acquire the resort funding business for an initial price of 90% of the businesses book value.
Cerberus will purchase ResCap model home assets with a value of about $475 million as part of the asset sale.
Cerberus will also purchase an additional $300 million of mortgages and mortgage-backed securities.
The mortgage lender is also in the midst of a debt exchange program that will help extend the maturity, or exchange for cash, debt totaling about $14 billion.
About $12.8 billion of debt will be exchanged, for new, long-term debt. Another $1.2 billion will be exchanged for cash.
Hattip to Bloomberg.
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