GMAC Announces Residential Capital Corporation Bond Offering

[pupp1]

FOR RELEASE: 2005-06-09 GMAC Announces Residential Capital Corporation Bond Offering

DETROIT - General Motors Acceptance Corporation (GMAC), the financial services subsidiary of General Motors Corporation (NYSE: GM), announced today that Residential Capital Corporation (ResCap), a wholly owned subsidiary, is proposing to make an offering of senior notes in one or more tranches through a private offering, subject to market conditions.

GMAC recently established ResCap as a holding company and transferred ownership of GMAC Mortgage Corporation and Residential Funding Corporation to it in a move to provide additional operational and financial flexibility and to enhance the liquidity of these operations.

The principal amount, maturity, interest rate and other terms of the Notes will be determined at pricing. ResCap intends to use a portion of the net proceeds of the proposed offering to repay indebtedness owed to GMAC. The remaining proceeds from the offering, if any, will be used for general corporate purposes.

The offering of the Notes will not be registered under the Securities Act of 1933, as amended, and the Notes may not be offered or sold in the United States absent registration or an applicable exemption from the registration requirements. The information contained in this press release shall not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of any of the Notes in any state in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any state.

ResCap is a wholly owned indirect subsidiary of GMAC and is separate from GMAC Commercial Mortgage Corporation. GM and GMAC have no intention of divesting, in whole or in part, their residential mortgage operations. ResCap expects to obtain investment grade ratings from DBRS, Fitch, Moody's Investors Service, and Standard & Poor's. GMAC would consider all reasonable actions to maintain ResCap's investment grade ratings.


General Motors Acceptance Corporation and its subsidiaries, operating under the umbrella GMAC Financial Services, provide automotive financing, commercial finance, insurance and mortgage products, and real estate services, and have a presence in more than 40 nations. A wholly owned subsidiary of General Motors since 1919, GMAC has extended more than $1.3 trillion in credit to finance more than 158 million vehicles.
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[zonty]

so, what, exactly, does this mean?