GMAC puts institutions ahead of private investors
Individual investors who bought SmartNotes from GMAC Financial Services are being left out of a plan by the General Motors financing unit to exchange cash, preferred shares or new debt for existing debt held by institutional investors. In the event of a bankruptcy, retail investors could end up with nothing, analysts said. Bloomberg (01 Dec.)
Individual investors who bought SmartNotes from GMAC Financial Services are being left out of a plan by the General Motors financing unit to exchange cash, preferred shares or new debt for existing debt held by institutional investors. In the event of a bankruptcy, retail investors could end up with nothing, analysts said. Bloomberg (01 Dec.)
Putting this another way, not only does GMAC want taxpayers to foot the bill and rescue them when they have finally got themselves stuck in a hole with bad auto-loans after years of massive profits from shafting high priced loans on unsuspecting car buyers with doubtful credit, NOW they want to shaft individual investors who bought the company's debt in favour of their institutional lenders. So if you are a US taxpayer and one of these individual investors in GMAC debt you would get doubly shafted if the bailout were be passed - and if you happened to also be a borrower of one of their auto-loans, you're triple shafted. That's a hattrick. If there was a prize for shocking ethics, surely they would win it.
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