Ally Financial Inc. · NYSE:ALLY
Ally Financial — General Motors Acceptance — Debt Investor Presentation (April 2006)
32 slides from Ally Financial's debt investor presentation, Apr 3, 2006
Slide 1: GMAC Fixed Income Investor Presentation
GMAC Fixed Income Investor Presentation April 3, 2006 1.00 p.m. - 2.30 p.m. DST
Slide 2: Forward Looking Statements
Forward Looking Statements In the presentation that follows and in related comments by General Motors Acceptance Corporation management, our use of the words "expect", "anticipate", "estimate", "forecast", "objective", "plan", "goal", "project", "outlook", "priorities," "targets", "intend", "evaluat
Slide 3: GM has agreed to sell a 51% controlling interest in GMAC to a Consortium
GM has agreed to sell a 51% controlling interest in GMAC to a Consortium led by Cerberus Capital Cerberus will control all of the Consortium's 51% voting shares Long-term and strategic investment by Consortium Minimum hold period of five years to allow for stability and growth Consortium and GM to i
Slide 4: Introduction (cont'd): $25 billion credit facilities and credit profile
Arranging credit facilities totaling $25 billion -- supported by $12.5 billion Citigroup commitment -- to enhance GMAC's already strong liquidity Committed 3-year revolving facility Asset-backed funding to support lease, wholesale, SmartBuy and other not traditionally securitized assets GMAC's inher
Slide 5: Value Enhancement
Believe value will be maximized for stakeholders not through short-term "cash out" actions, but by way of long-term focus on: Strengthening the capital base Improving the credit ratings Reducing borrowing costs Expanding net margins Driving higher ROE GMAC Strategy intended to support desired path t
Slide 6: Overview of Cerberus and The Consortium
Overview of Cerberus and The Consortium One of the largest private investment firms in North America ($18 billion under management) with over 20 years of experience Over 275 employees deployed in offices located in both the US (Atlanta, Chicago, LA and New York) and globally (Amsterdam, Frankfurt, L
Slide 7: Cerberus is Very Different Than Traditional Private Equity Firms
Cerberus is Very Different Than Traditional Private Equity Firms Cerberus has automotive and financial markets expertise Senior Operations Executives (Prior Experience) John Stomber (Global Treasurer, Merrill Lynch) Jim Jones (Group Executive VP for Consumer Credit, Bank of America) Lee Wilson (Trea
Slide 8: GMAC Investment Thesis: Expand Premier Global Finance Company
GMAC Investment Thesis: Expand Premier Global Finance Company Transaction Benefits GMAC Business Strengths Leadership positions across all major sectors #1 auto finance Top 10 player in mortgage #1 provider of extended warranty #1 provider of dealer inventory insurance Tremendous asset origination c
Slide 9: Recent Cerberus Investments Relevant to GMAC
Recent Cerberus Investments Relevant to GMAC Company Sector Description Ableco Finance (1997) Commercial Finance Premier standalone commercial finance company Aegis Mortgage (1999) Mortgage Diversified mortgage banking company AerCap Aviation Solutions (2005) Leasing Provides aircraft leasing, finan
Slide 10: GMAC Capitalization Summary
Common Equity Ownership Consortium 51% GM 49% Preferred Equity GM and Consortium to invest additional $1.9 billion in preferred equity to further bolster GMAC capital base $1.4 billion investment by GM $0.5 billion investment by Consortium Preferred stock intended to be structured with high equity c
Slide 11: GMAC Capitalization Summary (cont'd)
Long-term investment by Consortium Committed to a 5-year minimum hold period Restriction on IPOs of secondary shares Restrictions on sale of material subsidiaries In years 1-2 after closing, plan to retain essentially all GMAC's "after- tax" earnings in the business In years 3-5 after closing, Cerbe
Slide 12: Strong Independent Corporate Governance
Strong Independent Corporate Governance Cerberus will be the managing owner of GMAC LLC and control the Consortium's 51% voting shares Board Composition: 13 Board members Consortium: 6 GM: 4 Independent: 3 Audit Committee to consist of all three Independent Directors Consortium has the ability to ra
Slide 13: Protected Profitable Asset Generation Capability
Will continue to finance GM vehicles to customers across the full credit spectrum Profitable Asset Generation Capability Protected Services agreements will preserve GM / GMAC mutually-beneficial relationship for the long-term Support global $60+ billion a year auto loan origination platform Services
Slide 14: Mutually Beneficial Services Agreements
Mutually Beneficial Services Agreements Services Agreements support key GM-GMAC objectives: GM: Strategic support for GM vehicle sales worldwide GMAC: Increased finance penetration and revenue GMAC granted 10-year exclusivity covering U.S., Canadian and International subvented wholesale and consumer
Slide 15: Assets Retained By GM
Assets Retained By GM At closing, GM will retain approximately $20 billion of assets Predominantly U.S. lease assets and associated funding Net book value estimated at about $4 billion Retained lease assets reduce GMAC's credit exposure to GM Eliminates residual support payments owed by GM to GMAC i
Slide 16: Credit Exposure to GM
Credit Exposure to GM Under terms of transaction, GMAC's unsecured credit exposure to GM will be capped at $1.5 billion on a global basis Cap will include receivables from GM and any implicit "out of the money" risk sharing or residual value support due to loss in residual values Estimate that GMAC'
Slide 17: GM Call Option on Global Auto Finance Business
GM Call Option on Global Auto Finance Business GM Call Option GM call option term of ten years on Global Auto Finance business Can exercise if GM ratings are investment grade or are higher than GMAC's ratings Exercise price greater of: Fair market value 9.5 times the auto business net income
Slide 18: Update on GMAC Funding
GMAC FINANCIAL SERVICES Update on GMAC Funding
Slide 19: GMAC Funding Strategies
GMAC Funding Strategies GMAC will continue to finance its global operations with the many innovative funding channels it has established Committed whole loan facilities with Bank of America ($55 billion) and Bank of Nova Scotia ($20 billion) coupled with expected Citigroup-led funding facilities tot
Slide 20: $25 Billion Asset-backed Funding Facility
Additional credit facilities in the amount of $25B planned to be arranged by Citigroup to enhance GMAC's already strong liquidity $25B asset-backed revolving funding comprised of two facilities $10B expected to be available before closing $15B expected to be available at closing Substantial commitme
Slide 21: GMAC Global Liquidity Profile
GMAC Global Liquidity Profile GMAC has access to massive liquidity cushion Three large, multi-year funding agreements: Bank of America (BofA), Bank of Nova Scotia (BNS) and new $25B Citigroup-led facility BofA and BNS commitments for retail assets while Citigroup-led facilities includes leases, whol
Slide 22: ResCap Capital Structure
ResCap Capital Structure GMAC plans to maintain the ResCap firewall to preserve ResCap's relatively higher credit rating Firewall: Governance and Dividend Limitations ResCap already enjoys significant access to unsecured liquidity
Slide 23: GMAC Funding Plan
GMAC Funding Plan GMAC's innovative funding initiatives have reduced its need to rely on unsecured financing With a stable and potentially improving credit rating post-closing, GMAC will opportunistically seek to access the unsecured institutional and retail markets Will enhance GMAC's liquidity pro
Slide 24: Credit Ratings Post-Closing
Credit Ratings Post - Closing Transaction expected to achieve rating de-linkage from GM Sale by GM of controlling interest Dramatic reduction in GM exposure Sound governance to protect all GMAC stakeholders Contractual agreement that ensures arm's length GM-GMAC operating relationship Target stable
Slide 25: GMAC Strategy
GMAC FINANCIAL SERVICES GMAC Strategy
Slide 26: Strategic Vision: Create Premier Global Finance Company
Leadership positions across all major sectors #1 auto finance Top ten player in mortgage #1 provider of Extended Warranty #1 provider of dealer inventory insurance Tremendous asset origination capability World-class servicing Well-managed risk profile Global franchise spanning 40 countries Strategic
Slide 27: Earnings Diversification Strategy
Earnings Diversification Strategy GMAC has significantly increased earnings in recent years, with rapid growth of its insurance and mortgage operations GMAC intends to maintain a diversified earnings base with steady earnings growth in Auto Finance as well as Insurance/Mortgage Financing Mortgage/In
Slide 28: GMAC Auto Finance Opportunities
GMAC Auto Finance Opportunities Leverage existing relationships to capture opportunities within GM dealer channel Used car financing Non-prime auto financing (Nuvell) Expand real estate and other dealer loans Leverage existing dealer relationships to expand presence in non-GM dealer network Roughly
Slide 29: Next Steps
Next Steps Meet all pre-closing conditions PBGC agreement that GMAC and its subsidiaries will have no liability that could arise from GM's pension plans Repayment of certain inter-company debts Obtain significant number of regulatory approvals Certain legal opinions No Material Adverse Effect (inclu
Slide 30: Transaction Benefits Summary
Strengthened GMAC capital base long-term Preferred equity injection of $1.9 billion Earnings reinvestment provisions Improved GMAC liquidity Committed 3-year $25 billion funding facilities Anticipated access to unsecured markets GM paydown of large inter-company obligations Significant and steady fl
Slide 31: Back-Up
GMAC FINANCIAL SERVICES Back-Up
Slide 32: Recent Restatement of Cash Flows
Misclassifications of cash flows between operating and investing activities Restated certain cash flows over 2003-05 Related to: Certain mortgage loan cash flow activity Other non-cash transfer activity Restatement had NO impact in any period on: Net cash flow Net income, balance sheet or total stoc
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