The U.S. Treasury Department announced today that it plans to sell trust-preferred securities, known as TruPs, received from Ally Financial Inc., after the firm almost collapsed during the financial crisis.
The Treasury, who wouldn’t say how much would be sold or when the sale would take place, received $2.7 billion of the securities in the restructuring of Ally, formerly known as GMAC Inc., announced on December 30, 2009.
According to the Treasury’s statement, Ally Financial (the co. benefited from a $17.2 billion bailout from U.S. taxpayers and has said it wants to stage an IPO and regain its independence) won’t receive any proceeds from the sale, and the planned transaction doesn’t include any of Treasury’s current holdings of 74% of the shares of Ally’s common stock.
The offering also doesn’t include any of the Department’s $5.9 billion of mandatory convertible preferred stock in Ally or any of the Treasury’s holdings of Ally Financial’s common stock.
The proceeds would represent a partial recovery of the Department’s investment in the company, according to the statement.
Citigroup (C), Deutsche Bank (DB), JPMorgan Chase & Co. (JPM) and Morgan Stanley (MS) are managing the sale, the Treasury said.