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Ally Financial filed $2.7 billion Initial Public Offering

Ally Financial filed $2.7 billion Initial Public Offering

Posted by Liliana Castaño on March 27, 2014

Detroit-based Ally Financial Inc., one of the nation’s biggest auto lenders and the former captive finance company for General Motors, today filed an Initial Public Offering worth about $2.7 billion.

The Ally IPO is unusual in a couple of respects, according to today’s filing with the Securities and Exchange Commission:

 

First, the entire 95 million-plus shares to be sold in the IPO belong to the U.S. Treasury – a legacy of the U.S. government bailout of what was then GMAC, back in 2008. Ally does not share in the proceeds. At the top of a projected price range of $25 to $27 per share, the IPO could raise about $2.7 billion.

Ally has already repaid taxpayers and the  Troubled Asset Relief Program about $15.3 billion, or more than 70 percent of the government’s investment, the company said. However, the U.S. Treasury still owns about 37 percent of the company. That shrinks to about 17 percent after the IPO. Eventually, Treasury expects to reduce its stake to zero. That becomes a lot easier once the shares start trading on the New York Stock Exchange, probably in the next few weeks.

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