Survival mode...
Scotiabank takes GMAC loans
Canadian Press
TORONTO ? The Bank of Nova Scotia is taking over $20-billion (U.S.) worth of vehicle loans from General Motors.
The deal between the Canadian bank's Scotia Capital corporate and investment banking division and the General Motors Acceptance Corp. financial subsidiary of the world's biggest auto maker entails an immediate purchase of $3-billion US worth of loans.
The agreement announced Monday calls for committed purchases of GM-originated American car loans by Scotiabank under a $6-billion (U.S.) revolving facility over a five-year period.
The loans, described as ³a full spectrum of GMAC's active U.S. retail auto finance contracts,² will continue to be administered by GMAC.
³We are pleased to add these high-quality U.S. retail assets to our portfolio and to demonstrate our unique capability to meet the needs of clients who operate across Canada, Mexico and the U.S.,² said Steve McDonald, co-CEO of Scotia Capital.For GMAC, the deal frees up capital to be redeployed in other parts of its business such as mortgages and insurance, while continuing to support GM sales of cars and trucks.