Ally Financial Inc. Repays $4.5 Billion Debt Owed To GovernmentVW Staff
ALLY FINANCIAL, INC. (PINK:ALFI) has repaid $4.5 billion of debt owed to the US Government after it helped to bail the company out during the 2009 financial crisis.
ALLY FINANCIAL, INC. (PINK:ALFI), which used to go by the name of GMAC Financial Services, was previously the financial arm of the automaker General Motors Company (NYSE:GM) until the company sold it in 2006. The Government bailed Ally Financial out in 2008, and eventually gained a 74 percent equity stake in the company in December 2010.
ALLY FINANCIAL, INC. (PINK:ALFI) said Wednesday that it has now exited the Temporary Liquidity Guarantee Program of the Federal Deposit Insurance Corp. following the repayment. Previously in October the company repaid $2.9 billion of debt under the same program. Ally said that the repayment of the debt was an important step as it attempts to try and exit the government support programs.
Aside from the assistance Ally Financial received under the TLGP, the government also gave them a bailout to the tune of $17.2 billion. Ally has so far repaid $5.8 billion of that debt, by the selling off of assets.
In October Ally sold off its Canadian operations to the Royal Bank of Canada (NYSE:RY) (TSE:RY) for $4.1 billion. It also sold off its Mexican insurance business, ABA Seguros, to the ACE Group for $865 million. Last month saw the company sell more assets, including its operations in Europe, China, and Latin America – fetching $4.25 billion for General Motors Company (NYSE:GM).
The news of Ally Financial’s repaying of debt comes the same day that the US Treasury Department has announced it will be selling its significant stake in General motors back to the company over the next 15 months. General Motors will be purchasing 200 million shares at $27.50 – a 7.9 percent premium. The remaining 300 million shares have yet to have a sale date confirmed, though it could be as soon as January.
General Motors Company (NYSE:GM) closed at $25.49 on Tuesday after rising 2.6 percent. The company has gained 26 percent this year.