GMAC LLC, the auto and home lender trying to rescue itself by becoming a bank holding company, scrambled to line up more support for a $38 billion debt swap as some of its biggest investors continued to balk.
Pacific Investment Management Co., which manages the world's biggest bond fund, failed to tender its holdings, according to people familiar with the negotiations. Pimco earlier agreed to participate along with the rest of a bondholder committee that sought better terms, said the people, who declined to be identified because talks were private.
Holders of $16.9 billion, or 58%, of eligible GMAC notes and $3.5 billion, or 38%, of securities issued by its Residential Capital LLC mortgage unit had tendered by the end of Wednesday, GMAC said in a federal filing Thursday. The deadline for early delivery is today.
GMAC, the primary lender to General Motors Corp. dealers, sweetened terms of the debt swap last week and has extended the deadline five times since announcing the deal in November. The exchange is part of the Detroit company's plan to convert to a bank holding company and gain access to federal bailout programs.
If the exchange is not completed by the end of the year, there is a "significant risk" the firm will default on its debt, GMAC said in a filing last month. Analysts have said bankruptcy may follow.
"We're disappointed with the follow-through participation through yesterday," GMAC spokeswoman Gina Proia said in an interview Thursday. "However, we're hopeful we can still achieve the needed participation to meet the capital requirement by Friday."
Mark Porterfield, spokesman for Pimco, of Newport Beach, Calif., declined to comment.