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January 2009

GMAC debt restructuring: Banks hobbled in workout deals


Having negotiated away their covenant protection in the boom years, lenders find themselves in a weak negotiating position in the bust.


GMAC bondholders’ successful negotiation of improved terms on their $38 billion exchange and tender offer is a rare example of creditors being able to flex their muscles in today’s market. GMAC, desperate to achieve bank-holding status by boosting its regulatory capital to $30 billion, originally offered bondholders a split between a cash offer of as little as 55c on the dollar (capped at...


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