Total Ally Proceeds Now Exceed Total Disbursements
WASHINGTON – As part of its continued progress in winding down the Troubled Asset Relief Program (TARP), the U.S. Department of the Treasury today announced that it has agreed to sell 95,000,000 shares of Ally Financial Inc. (Ally) common stock at a price to the public of $25.00 per share, for $2.375 billion in proceeds to taxpayers from Ally’s initial public offering (IPO). Prior to the IPO, taxpayers held approximately 37 percent of common stock in the company, or 177,311,010 shares. After the closing of the offering, taxpayers will hold approximately 17 percent of common stock, or 82,311,010 shares, in the company. Treasury has granted the underwriters a 30-day option to purchase an additional 14,250,000 of the Ally common stock shares it holds at the initial public offering price.
“Taxpayers’ investment in Ally – together with the broader auto rescue – helped protect the economy by avoiding a catastrophic and disorderly collapse of the American auto industry,” said Treasury Under Secretary Mary Miller. “With this offering, taxpayers have now recovered more than they invested in Ally.”
TARP’s most important goal was to stabilize the financial system and prevent a second great depression, not to make a profit. Still, when including anticipated proceeds from Ally’s IPO, taxpayers will have recovered approximately $17.7 billion, approximately $500 million more than was originally invested in the company. Including the sale of Treasury’s AIG shares, Treasury will have recovered a total of $438.3 billion on TARP investments, compared to $423.4 billion disbursed. Treasury will continue to evaluate exit strategies for its remaining Ally investment and wind down TARP as soon as practicable, and in a way that maximizes taxpayer value.
For more details on Treasury’s lifetime cost estimates for TARP programs, please visit Treasury’s Monthly 105(a) Report to Congress on TARP at this link.
The initial public offering is expected to close on April 15, 2014, subject to customary closing conditions. Citigroup Global Markets Inc., Goldman, Sachs & Co., Morgan Stanley & Co. LLC, and Barclays Capital Inc. served as the global coordinators and joint book-running managers for this offering. Joint book-running managers also include BofA Merrill Lynch, Deutsche Bank Securities and J.P. Morgan. Lazard served as Treasury's financial advisor with respect to the management and disposition of Treasury's investment in Ally.
The Ally common stock is being sold pursuant to an effective registration statement previously filed by Ally with the Securities and Exchange Commission (“SEC”). The preliminary prospectus relating to these securities was filed by Ally with the SEC on March 27, 2014, and a final prospectus will be filed by Ally with the SEC and will be available on the SEC’s website at http://www.sec.gov.
Copies of the final prospectus, when available, may be obtained from Citigroup Global Markets Inc., c/o Broadridge Financial Solutions, 1155 Long Island Avenue, Edgewood, NY 11717, or by calling (800) 831-9146; Goldman, Sachs & Co., Prospectus Department, 200 West Street, New York, NY 10282, by calling (866) 471-2526, or by emailing email@example.com; Morgan Stanley & Co. LLC, Attention: Prospectus Department, 180 Varick Street, 2nd Floor, New York, NY 10014 by calling (866) 718-1649, or by emailing firstname.lastname@example.org; and Barclays Capital Inc. c/o Broadridge Financial Solutions, 1155 Long Island Avenue, Edgewood, NY 11717, by calling (888) 603-5847, or by emailing Barclaysprospectus@broadridge.com.
This press release does not constitute an offer to sell or a solicitation of an offer to buy the common stock, nor shall there be any offer, solicitation or sale of any common stock in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state or jurisdiction.