NEW YORK, Aug 16 (Reuters) - Ally Financial Inc is planning to sell roughly $1 billion in common stock, a move that would help boost the company’s capital levels, CNBC reported on Friday.
Proceeds from the sale, which could happen early next week or as soon as Friday afternoon, will help raise the company’s capital levels after missing the Federal Reserve’s mark in this year’s stress test, CNBC said.
The Fed singled out the auto lender last March as the weakest of 18 major banks in its stress test of whether the banks could survive a severe economic downturn and a stock market crash.
Ally must resubmit its new test to the Fed by the end of September, and if it passes, the company could go public this winter or early next year, CNBC said.
The stock sale would add roughly 100 basis points to Ally’s 1.5 percent Tier 1 common capital ratio, making it roughly 2.5 percent, CNBC said.