ResCap Announces Interim Results of Private Exchange Offers and Cash Tender
Offers
MINNEAPOLIS, May 21 /PRNewswire/ -- Residential Capital, LLC ("ResCap")
today announced the interim results of its pending private exchange offers and
cash tender offers for U.S. dollar equivalent $14.0 billion in aggregate
principal amount of its outstanding debt.
As of 5:00 p.m., New York City time, on Wednesday, May 21, 2008 (the
"early delivery time"), approximately $2.6 billion aggregate principal amount
(or 80%) of old notes listed in the table below that mature in 2008-2009 ("old
2008-2009 notes") had been validly tendered and approximately U.S. dollar
equivalent $6.0 billion aggregate principal amount (or 63%) of old notes
listed in the table below that mature in 2010-2015 ("old 2010-2015 notes" and,
collectively with the old 2008-2009 notes and June 2008 notes referred to
below, the "old notes") had been validly tendered.
The table below shows, as of the early delivery time, the outstanding
principal amount of each series of old notes and the principal amount of old
notes of each series tendered in the offers (including as a percentage of the
outstanding principal amount).
Outstanding Principal
Title of Old Notes Amount Principal Amount Tendered
Old 2008-2009 Notes
Floating Rate Notes due
2008 $398,848,000 $287,171,000 72.0%
8.125% Notes due 2008 $684,014,000 $521,045,000 76.2%
Floating Rate Notes due
April 2009 $714,000,000 $651,422,000 91.2%
Floating Rate Notes due
May 2009 $949,000,000 $816,505,000 86.0%
Floating Rate
Subordinated Notes
due 2009 $576,961,000 $371,513,000 64.4%
Total $3,322,823,000 $2,647,656,000 79.7%
Old 2010-2015 Notes
8.375% Notes due 2010 $2,154,500,000 $901,597,000 41.8%
Floating Rate Notes
due 2010 euro 542,800,000 euro 181,815,000 33.5%
8.000% Notes due 2011 $1,243,500,000 $1,025,694,000 82.5%
7.125% Notes due 2012 euro 550,000,000 euro 438,702,000 79.8%
8.500% Notes due 2012 $928,500,000 $833,527,000 89.8%
8.500% Notes due 2013 $1,604,500,000 $724,667,000 45.2%
8.375% Notes due 2013 GBP 348,920,000 GBP 307,839,000 88.2%
9.875% Notes due 2014 GBP 363,000,000 GBP 297,730,000 82.0%
8.875% Notes due 2015 $486,500,000 $335,025,000 68.9%
Total U.S. Dollar
Equivalent (1) $9,537,274,896 $5,987,350,936 62.8%
(1) To determine the total U.S. dollar equivalent, the principal amounts
of those series of old notes denominated in Euro and Sterling have
been converted to U.S. dollars at current currency exchange rates.
The currency exchange rates that will be used to determine the
consideration in the offers will be set on the expiration date.
In addition, approximately $853.4 million aggregate principal amount of
Floating Rate Notes due June 9, 2008 (the "June 2008 notes") were tendered for
cash as of the early delivery time.
As previously announced, ResCap has received requisite consents as
described in the informational documents relating to the offers and has
entered into supplemental indentures adopting the proposed amendments to the
indentures under which the old notes were issued. The amendments to the old
notes release the subsidiary guarantees of ResCap's obligations under the old
notes and eliminate certain of the restrictive covenants and events of default
in the indentures. Accordingly, claims with respect to all new notes issued in
the exchange offers will be effectively senior to claims with respect to
unexchanged old notes to the extent of the value of all assets of the
subsidiary guarantors as well as the collateral securing the new notes. Based
upon tenders to date and subject to consummation of the offers, approximately
$5.7 billion aggregate principal amount of new notes would be issued in
exchange for old notes.
The offers will expire at 11:59 p.m., New York City time, on June 3, 2008,
unless extended by ResCap with respect to any or all series of old notes. Old
notes tendered pursuant to the offers may no longer be withdrawn. The early
delivery time (as defined in the informational documents relating to the
offers) has passed. Old notes tendered after the early delivery time are not
entitled to the early delivery payment described in the informational
documents relating to the offers.
The offers are subject to significant conditions that are further
described in the informational documents. In particular, the offers are
conditioned on ResCap entering into a new first lien senior secured credit
facility, providing for at least $3.5 billion of commitments on terms
acceptable to ResCap. As a result of these conditions, ResCap may not be
required to exchange or purchase any of the old notes tendered.
The new notes will not be registered under the Securities Act of 1933, as
amended (the "Securities Act"), or any other applicable securities laws and,
unless so registered, the new notes may not be offered, sold, pledged or
otherwise transferred within the United States or to or for the account of any
U.S. person, except pursuant to an exemption from the registration
requirements thereof. Accordingly, the new notes are being offered and issued
only (i) in the United States to "qualified institutional buyers" (as defined
in Rule 144A under the Securities Act), or QIBs, and (ii) outside the United
States to non-U.S. persons (as defined in Regulation S under the Securities
Act) who are "qualified investors" within the meaning of Article 2.1(e) of the
Prospectus Directive as adopted within each relevant member state of the
European Economic Area, in a private transaction in reliance upon an exemption
from the registration requirements of the Securities Act. ResCap will enter
into a registration rights agreement pursuant to which, under certain
circumstances, it will agree to file an exchange offer registration statement
or a shelf registration statement with respect to the new notes.
The complete terms and conditions of the offers are set forth in ResCap's
Offering Memorandum and Consent Solicitation Statement dated May 5, 2008, as
supplemented on May 14, 2008 (the "offering memorandum"), and the related
letter of transmittal and consent.
Documents relating to the offers will only be distributed to noteholders
who complete and return a letter of eligibility confirming that they are
within the category of eligible investors for this private offer. Noteholders
who desire a copy of the eligibility letter should contact Global Bondholder
Service Corporation, the information agent for the offers, at (866) 470-3800
(U.S. Toll-free) or (212) 925-1630 (Collect).
This press release is for informational purposes only and is neither an
offer to purchase nor a solicitation of an offer to sell the notes. The
offers to buy or exchange the old notes, as applicable, are only being made
pursuant to the offering memorandum and the related letter of transmittal and
consent that ResCap is distributing to holders of the old notes. The offers
are not being made to holders of the old notes in any jurisdiction in which
the making or acceptance thereof would not be in compliance with the
securities, blue sky or other laws of such jurisdiction. In any jurisdiction
in which the securities laws or blue sky laws require the offers to be made by
a licensed broker or dealer, the offers will be deemed to be made on behalf of
ResCap by one or more of the dealer managers, or one or more registered
brokers or dealers that are licensed under the laws of such jurisdiction.
Forward-Looking Statements
In this press release, the use of the words "expect," "anticipate,"
"estimate," "forecast," "initiative," "objective," "plan," "goal," "project,"
"outlook," "priorities," "target," "intend," "evaluate," "pursue," "seek,"
"may," "would," "could," "should," "believe," "potential," "continue," or the
negative of any of those words or similar expressions is intended to identify
forward-looking statements. All statements herein, other than statements of
historical fact, including without limitation, statements about future events
and financial performance, are forward-looking statements that involve certain
risks and uncertainties.
While these statements represent our current judgment on what the future
may hold, and we believe these judgments are reasonable, these statements are
not guarantees of any events or financial results, and ResCap's actual results
may differ materially due to numerous important factors that are described in
the most recent reports on SEC Form 10-K for ResCap, each of which may be
revised or supplemented in subsequent reports on SEC Forms 10-Q and 8-K. Such
factors include, among others, the following: securing low cost funding to
sustain growth for ResCap; the ability to maintain an appropriate level of
debt; recent developments in the residential mortgage market, especially in
the nonprime sector; the impact on ResCap of the continuing decline in the
U.S.
housing market; changes in U.S. government-sponsored mortgage programs or
disruptions in the markets in which ResCap's mortgage subsidiaries operate;
changes in our contractual servicing rights; costs and risks associated with
litigation; changes in ResCap's accounting assumptions that may require or
that result from changes in the accounting rules or their application, which
could result in an impact on earnings; failure to remediate a material
weakness in ResCap's internal controls that could result in material
misstatements in its financial statements in future periods; changes in the
credit ratings of ResCap; changes in economic conditions, currency exchange
rates or political stability in the markets in which we operate; and changes
in the existing or the adoption of new laws, regulations, policies or other
activities of governments, agencies and similar organizations. Investors are
cautioned not to place undue reliance on forward-looking statements. ResCap
does not undertake any obligation to update publicly or otherwise revise any
forward-looking statements, whether as a result of new information, future
events or other such factors that affect the subject of these statements,
except where expressly required by law.
SOURCE Residential Capital, LLC
Gina Proia, +1-917-369-2364, gina.proia@gmacfs.com, or Toni Simonetti,
+1-917-369-2360, toni.simonetti@gmacfs.com, both of GMAC Financial Services
