After news that GMAC had qualified for emergency loans from the Federal Reserve by converting itself into a bank holding company, GM stock rallied on Friday. Automotive News reports:
Shares of General Motors jumped today after its auto finance affiliate GMAC won access to government lending programs, while analysts estimated GMAC might be seeking loans of more than $6 billion.
The Federal Reserve approved GMAC’s status as a bank on Wednesday, giving the troubled finance company access to the Treasury-run financial bailout package, which may help GMAC avoid bankruptcy and continue financing of dealer and consumer loans for GM vehicles.
The article notes that analysts believe the availability of emergency loans for GMAC, in addition to the $17.4 billion made available to the parent company, should help GM avoid bankruptcy. Shares of GM stock closed up 41 cents at $3.66, a 12.6% increase, on Friday.