11-20-13 4:15 PM EST | Email Article

Ally Financial Inc. said Wednesday it repaid $5.9 billion of its $17.2 billion bailout as the auto lender works to get out from government ownership.

The move puts the government a step closer to exiting its stake in the Detroit-based company, which struggled under the weight of subprime mortgage losses during the financial crisis that almost led to the firm's collapse.

"Taxpayers are now in a stronger position to maximize the value of their remaining investment in Ally," Timothy Bowler, deputy assistant secretary of the Treasury, wrote in a Treasury blog post Wednesday. He added that Treasury "will work with Ally on a public offering or private sale of its common shares or sales of assets to complete its exit."

Ally Chief Executive Michael Carpenter has previously said an IPO or private transaction could be options as the U.S. government looks to exit its remaining stake in the company.

Ally on Friday said it expected to repurchase $5.9 billion of preferred shares owned by the Treasury after the Federal Reserve said it didn't object to revised capital plan from the company. Including Wednesday's announcement, Ally has repaid $12.3 billion of its bailout, Mr. Bowler wrote.

"Looking ahead, we will be focused on taking steps to further improve profitability, maintain strong core auto finance and direct banking franchises and fully exit the Troubled Asset Relief Program," Mr. Carpenter said in a statement on Wednesday.

The Fed in March rejected a plan Ally submitted under the regulator's stress tests of big banks, deeming its capital levels would be too low to survive an economic downturn.

The move was a blow to the company, which has worked to dig its way out of legal issues largely tied to its subprime-mortgage subsidiary, Residential Capital LLC, which filed for Chapter 11 bankruptcy last year. The final goal is repayment of the bailout.

To boost its capital levels and move ahead on those plans, Ally said in August it would sell shares through a private placement of common stock to about a dozen investors and seek permission to repurchase the preferred shares from Treasury.

Ally said Wednesday that it completed the private sale of 216,667 shares for about $1.3 billion.

The moves reduced Treasury's ownership of Ally to about 64% from 74%.

Mr. Bowler is in line to head manage the government's crisis relief programs, succeeding Timothy Massad as Assistant Secretary for Financial Stability, a Treasury spokesman said Wednesday. The position includes unwinding the government's investments in banks under the Troubled Asset Relief Program.

Mr. Massad is President Barack Obama's pick to head the Commodity Futures Trading Commission, though he must be approved by the Senate for the position.

-Ryan Tracy contributed to this article.

Write to Andrew R. Johnson at andrew.r.johnson@dowjones.com

 

Subscribe to WSJ: http://online.wsj.com?mod=djnwires


(END) Dow Jones Newswires

November 20, 2013 16:15 ET (21:15 GMT)

Copyright (c) 2013 Dow Jones & Company, Inc.
Add a Comment

News   More...

Start Premium Trial Register For Free

P F Fund Financial Data (13,000+ funds)
P F Stock Financial Data (7,000+ stocks)
P F Stock and Fund Screeners (basic)
P F Investing Articles and Market Commentary
P F Articles Archive (>30 days)
P F Discuss (dozens of stock, fund, bond, and general bulletin boards)
P F Portfolio Manager (basic)
P F Morningstar Investment Classroom
P F Access Your Portfolio Anytime, Anywhere via Your Mobile Device
P   Morningstar Fund Analyst Reports (full research on 1,700 funds, ETFs, and CEFs)
P   Morningstar Stock Analyst Reports (full research on more than 1,100 stocks)
P   Portfolio Manager (advanced with 10 X-Ray analyses, including recommendations)
P   Portfolio Monitor (monthly and on-demand personalized portfolio statements)
P   Morningstar Proprietary Stock Information (stock star ratings, buy/sell prices, economic moat ratings, and more)
P   Morningstar 5-Star Stock and Fund Favorites & Red Flags eNewsletters
P   Premium Stock and Fund Screeners (advanced with nearly infinite ways to find the best securities for you)
P   Discounts on Morningstar newsletters, books, seminars, and more

Sign-up to Morningstar


Basic Access

Articles and Videos
Morningstar video reports, articles, data, and tools. Dig into our lineup of e-newsletters and investing classroom courses outlining sensible strategies for maximizing your investments.
Morningstar Discuss
Follow the buzz on individual stocks or fund families. Plus, read the latest posts from Morningstar members and analysts.
Portfolio Manager
Track your investments and watch lists with our Portfolio Manager. Customize your view with our comprehensive stock, fund, and ETF data.

Access these features and more when you sign up for Free Membership.
Join Morningstar today. It's Free.

Unlimited Access

Analyst Research
Gather in-depth, actionable insight on over 3,700 stock and mutual funds covered by Morningstar analysts. View our mutual fund Analyst Reports favored by professionals, savvy experienced investors, and new investors researching options for retirement savings, college plans, or other investment needs.
Portfolio X-Ray®
Ensure your portfolio is positioned exactly how you want with Morningstar's X-Ray Interpreter and Stock Intersection tools. A Barron's "Best of the Web" award winner for five years running, X-Ray Interpreter goes under the hood of your portfolio to provide a useful allocation, sector, and geographic analysis. And you can discover how much of a stock you really own, individually and through mutual funds, with Stock Intersection.
Investment Picks
Find new 5-star stocks (greatly undervalued companies) to consider daily. Our 5-star stock rating is a proven winner, consistently beating benchmarks like the S&P 500. Plus, browse our Fund Analyst Picks and Stewardship Grades to find shareholder-friendly mutual funds that are poised for outperformance.
Portfolio Monitor
Get a clear view of your investments with personalized reports about your portfolio. Receive monthly statements and generate reports on-demand to help you stay on track to meet your investment goals.

Access these features and more when you sign up for Premium Membership.
Start your free 14-day trial today online
Your subscription may be tax deductible. Please contact your tax advisor.

Content Partners
Morningstar - - Ally Financial Repays $5.9 Billion to U.S. Treasury
Name |  Ticker |  Star Rating |  Market Cap |  Stock Type |  Sector |  Industry Star Rating |  Investment Style |  Total Assets |  Category |  Top Holdings |  Top Sectors |  Symbol |  Title Star Rating |  Category |  Total Assets |  Top Holdings |  Top Sectors |  Symbol |  Name Topic |  Sector |  Key Indicators |  User Interest |  Market Cap |  Industry Name |  Ticker |  Star Rating |  Market Cap |  Stock Type |  Sector |  Industry Star Rating |  Investment Style |  Total Assets |  Category |  Top Holdings |  Top Sectors |  Symbol / Ticker |  Title Star Rating |  Category |  Total Assets |  Symbol / Ticker |  Name Title |  Date |  Author |  Collection |  Popularity |  Interest Title |  Date |  Company |  Symbol |  Interest |  Popularity Title |  Date |  Company |  Symbol |  Interest |  Popularity Title |  Date |  Author |  Collection |  Interest |  Popularity

Previous: Ally Financial Reaches Agreement Over Board Nominees  |  Next: Ally Financial Repays $5.9 Billion to U.S. Treasury--Update