Ally Announces Private Placement of Common Stock and Plan to Repurchase Securities from U.S. Treasury

Additional capital supports CCAR resubmission and U.S. Treasury repayment plans

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Aug 20, 2013, 09:00 ET

DETROIT, Aug. 20, 2013 /PRNewswire/ -- Ally Financial Inc. (Ally) today announced transactions that will further strengthen the company's common equity base in support of its Comprehensive Capital Analysis and Review (CCAR) resubmission and advance its plans to repay the remaining investment to the U.S. taxpayer. Ally entered into agreements with certain investors providing for a private placement of 166,667 shares of Ally common stock for an aggregate purchase price of $1 billion. In connection with the private placement, Ally also entered into agreements with the U.S. Treasury providing for the repurchase by Ally of all the outstanding shares of the Mandatorily Convertible Preferred (MCP) securities held by the U.S. Treasury and the termination of the U.S. Treasury's existing share adjustment right.

The agreement requires the funding of the private placement to take place no later than Nov. 30, 2013, and the private placement is subject to certain conditions, including receiving a non-objection from the Federal Reserve to the CCAR resubmission, the repurchase by Ally of all outstanding shares of the MCP securities held by the U.S. Treasury, and the elimination of the share adjustment right.

"These transactions are key steps in Ally's journey toward repaying the remaining investment by the U.S. taxpayer," said Chief Executive Officer Michael A. Carpenter. "Ally has undergone a complete restructuring and transformation in recent years, from addressing its mortgage risk to further strengthening its leading automotive finance and direct banking franchises. We are encouraged by the strong investor interest in the company through the process to raise the additional common equity and believe it validates the progress that has been made over recent years."

Carpenter continued, "The actions announced today will clear the way for Ally to pursue the next steps to ultimately exit the TARP program and enable its operations to further thrive."

The agreements Ally has with the U.S. Treasury with respect to the MCP repurchase and share adjustment right is subject to certain conditions, including receiving a non-objection from the Federal Reserve to the CCAR resubmission and successfully completing the private placement. Upon fulfillment of the conditions, Ally will make a cash payment to the U.S. Treasury of $5.2 billion to repurchase $5.938 billion par value of MCP. Further, a cash payment of $725 million will be made to terminate the share adjustment right.

Ally has currently paid the U.S. Treasury approximately $6.2 billion on its investment and upon completion of these transactions, Ally will have paid the U.S. Treasury approximately $12.1 billion, more than two-thirds of the investment made in the company.

About Ally Financial
Ally Financial Inc. is a leading automotive financial services company powered by a top direct banking franchise. Ally's automotive services business offers a full suite of financing products and services, including new and used vehicle inventory and consumer financing, leasing, inventory insurance, commercial loans and vehicle remarketing services. Ally Bank, the company's direct banking subsidiary and member FDIC, offers an array of deposit products, including certificates of deposit, savings accounts, money market accounts, IRA deposit products and interest checking. Ally's Commercial Finance unit provides financing to middle-market companies across a broad range of industries.

With approximately $150.6 billion in assets as of June 30, 2013, Ally operates as a bank holding company. For more information, visit the Ally media site at http://media.ally.com or follow Ally on Twitter: @Ally.

Contact:

Gina Proia
646-781-2692
[email protected]

SOURCE Ally Financial