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GMAC's ResCap scrambles for cash

GMAC's Residential Capital Corp. says it could run out of money in June. Hopes to roll notes over, sell assets, get bank relief. Link to filing.

    by Joseph N. DiStefano
    Published 

"There is a significant risk that we will not be able to met our debt service obligations, be unable to meet certain financial covenants in our credit facilities, and be in a negative liquidity position in June 2008," GMAC LLC's Residential Capital Corp. says in a new SEC filing.

The giant home lender, which is based in Minnesota but has its major office in Horsham, has $1.2 billion due in June, $1.8 billion in July, and $1.1 billion in November. It's trying to swap old notes for longer-term debt, borrow money from GMAC, and ease its bankers' loan requirements.

If all that works, ResCap will still need $600 million in new cash by June 30 -- which means it'll have to sell some mortgages, time-share loans, European loans and non-core businesses.

See ResCap filing

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