GMAC sells $4.5 bln bonds in 1st govt-backed deal

NEW YORK, June 3 (Reuters) - Auto and mortgage lender GMAC LLC on Wednesday priced a $4.5 billion two-part note sale, its first debt issue backed by the Federal Deposit Insurance Corp.

GMAC originally launched the deal at $4.25 billion, but later increased the size due to high demand for bonds issued under the government's Temporary Liquidity Guarantee Program.

"I think everyone is just putting their faith in the FDIC in guaranteeing this paper as opposed to really wanting exposure to GMAC," said Bill Bemis, securitized portfolio manager at Aviva Investors in Des Moines, Iowa.

The sale includes a $3.5 billion fixed-rate tranche due Dec. 19, 2012, which priced at a yield spread of 80.1 basis points over comparable Treasuries, or equal to mid-swaps, according to IFR, a Thomson Reuters service.

It also included a $1.0 billion floating-rate tranche, also due Dec. 19, 2012, which priced at the three-month London interbank offered rate, according to IFR.

Banc of America Securities, Barclays, Deutsche Bank and JPMorgan managed the sale, said IFR.

Despite high demand for the deal and the fact that GMAC is authorized to issue up to around $7.5 billion in bonds under its TLGP agreement, the company opted to sell only $4.5 billion, easing some investors' fears that the company may have tried to secure more funding than it needed its first time selling FDIC backed debt.

With the FDIC guarantee, the junk-rated company can issue debt with a triple-A rating, effectively allowing it access to much cheaper financing than would otherwise be available to the embattled lender.

GMAC carries a CCC rating, or eight notches into junk territory.

"They need this funding to have a shot at surviving bankruptcy, in becoming a successful firm, and I would expect that they will continue to issue paper under the FDIC umbrella," said Michael Skinner, vice president of agency and TLGP trading at Wall Street Access in New York.

GMAC is the preferred lender to auto buyers of General Motors Corp GMGMQ.PK(GM.N) and Chrysler, both of which filed for bankruptcy protection in recent weeks.

GMAC has received $12.5 billion in government infusions since December, including $7.5 billion on May 21, aimed at boosting credit to car buyers and bolstering GMAC's capital position. (Reporting by Tom Ryan; Editing by Dan Grebler)