The US Treasury announced Wednesday a 3.8 billion dollar fresh capital injection into ailing GMAC, the former finance arm of General Motors that became a bank to access federal rescue aid.
It had previously injected 12.5 billion dollars in capital into GMAC.
The 3.8 billion dollar capital injection will be in the form of 2.54 billion dollars of trust preferred securities and 1.25 billion dollars of mandatory convertible preferred (MCP) stock.
Treasury said it would also receive warrants for both types of stocks, totaling 190 million dollars, which it would exercise immediately at the close of the transaction.
The Treasury, headed by Secretary Timothy Geithner, said it would convert 3.0 billion of its existing MCP, which was invested in May 2009, into common equity "to boost the quality of the capital supporting GMAC."
That move will raise Treasury?s equity stake in GMAC to 56 percent from 35 percent. (Google News)
Why does it always seems like "we" are the ones being injected?!?