Ally to file for IPO in next two weeks: sources

NEW YORK (Reuters) - Ally Financial, the auto and mortgage lender majority-owned by the U.S. government, is expected to file paperwork for its initial public offering in the next two weeks, two sources familiar with the situation said on Monday.

The IPO will ultimately raise between $6 billion and $7 billion, including common stock and convertible securities, one of the sources said. Citigroup Inc (C.N), Goldman Sachs Group Inc (GS.N), JPMorgan Chase & Co (JPM.N) and Morgan Stanley (MS.N) will be listed as the four lead underwriters on the IPO paperwork, that source said.

Details of Ally's IPO filing are not public and the sources declined to be named. Ally Financial and the banks declined comment.

Both sources said that the filing, which will be made with the U.S. Securities and Exchange Commission, will be for a smaller, placeholder amount.

Filing for a smaller amount allows an issuer to evaluate market conditions closer to the time of the IPO and is common practice for big IPOs. When U.S. automaker General Motors Co (GM.N) first filed its IPO paperwork with the SEC, it filed for an IPO of up to $100 million.

Including the overallotment, GM ultimately raised $23.1 billion.

An IPO by Ally would allow the U.S. government to begin selling down its 73.8 percent stake in the lender and would be the latest in a handful of offerings by government-rescued companies including GM and insurer American International Group Inc (AIG.N), which is preparing a roughly $15 billion share sale.

Ally was bailed out multiple times by U.S. taxpayers in 2008 and 2009 with more than $17 billion of cash injections. It posted its fourth consecutive quarterly profit in February.

Sources previously told Reuters Ally's IPO could include $1 billion to $1.5 billion of convertible securities and that Barclays Capital BARCBC.UL and Deutsche Bank AG (DBKGn.DE) also would be among the underwriters.

(Reporting by Clare Baldwin, additional reporting by Alina Selyukh; editing by Carol Bishopric)