Ally Completes Another Convertible Securities Repurchase

Ally Financial Inc. said Wednesday it completed the repurchase of all outstanding shares of the “mandatorily” convertible preferred securities held by the U.S. Department of the Treasury and eliminated the share adjustment provision.  

Specifically,  Ally has repaid more than 70% of the investment to date, including the $5.9 billion payment today.  In total, Ally has repaid $12.3 billion on an investment of $17.2 billion, bringing it closer to paying of its debts to the federal government.

“We’re very pleased,”  Gina Proia, chief communications officer at Ally told Auto Finance News.

What happens next? Ally has said before that it is committed to repaying the taxpayer investment in full.

“Now that this transaction is completed, we’re going to look at various options that would maximize shareholder value,” Proia said.

That could include an initial public offering, but ultimately, the U.S. Treasury will determine when and how they choose to sell their common equity stake in Ally.

The U.S. Treasury currently holds around 64% of the common equity in Ally after the Wednesday transaction, down from 74%. The remaining 36% of the Ally common equity is held by a mix of existing and new institutional investors.