Exhibit 99.1
For Release
July 26, 2005
11:30 am
GMAC Agrees to Sell Up to $55 billion of U.S. Retail Automotive Assets to
Bank of America over five years
Deal provides new automobile finance investment opportunities for
Bank of America and committed source of funding for full spectrum of active
retail auto contracts for GMAC
Detroit; Charlotte, NC --- General Motors Acceptance Corp. (GMAC), the financial
services subsidiary of General Motors Corp. (NYSE: GM), and Bank of America
(NYSE: BAC) today announced a long-term strategic financing agreement regarding
GMAC's U.S. automotive retail assets. The agreement calls for a committed
purchase by Bank of America of up to $55 billion worth of GMAC retail automotive
contracts over a five-year period, commencing July 2005 and concluding June
2010.
Bank of America will make an initial purchase of $5 billion. In each of the
agreement's five fiscal years (July 1-June 30), Bank of America will purchase up
to $10 billion of GMAC's full spectrum of active U.S. retail auto finance
contracts. GMAC will continue to service the auto finance contracts.
The agreement expands the existing relationship between GMAC and Bank of
America. GMAC will be able to accelerate its planned transition from an
"originate and store" to an "originate and sell" U.S. auto finance business
model, while Bank of America makes a significant investment to grow its
automotive finance business.
"This agreement allows Bank of America to leverage our low cost of funding, risk
management expertise and strong lending base to the benefit of an important
client," said Tim Russi, president of Bank of America Dealer Financial Services
- -- the auto, motorcycle, marine and recreational vehicle financing unit of Bank
of America. "Our strategic investment in systems, data, people and processes
over the past several years has positioned us to capitalize on this opportunity
and significantly expand our share of the auto financing market."
Sanjiv Khattri, GMAC's executive vice president and chief financial officer,
said, "We are very pleased to enter into this landmark agreement with Bank of
America, our long-time partner in so many innovative transactions. This
agreement leverages GMAC's world-class origination and servicing capabilities
with Bank of America's world-class funding capabilities. It allows GMAC to
fulfill its strategic mission to finance more GM vehicles,
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without undue strain on the balance sheet. This further advances GMAC toward its
`originate and sell' business model in U.S. auto finance, providing us far
greater flexibility to reallocate capital and further diversify the business
portfolio."
Bank of America
Bank of America is one of the world's largest financial institutions, serving
individual consumers, small and middle market businesses and large corporations
with a full range of banking, investing, asset management and other financial
and risk-management products and services. The company provides unmatched
convenience in the United States, serving 33 million consumer relationships with
more than 5,800 retail banking offices, more than 16,700 ATMs and award-winning
online banking with more than twelve million active users. Bank of America is
the No. 1 overall Small Business Administration (SBA) lender in the United
States and the No. 1 SBA lender to minority-owned small businesses. The company
serves clients in 150 countries and has relationships with 98 percent of the
U.S. Fortune 500 companies and 85 percent of the Global Fortune 500. Bank of
America Corporation stock (ticker: BAC) is listed on the New York Stock
Exchange.
GMAC
General Motors Acceptance Corporation and its subsidiaries, operating under the
umbrella GMAC Financial Services, provide automotive financing, commercial
finance, insurance and mortgage products, and real estate services, and have a
presence in more than 40 nations. A wholly owned subsidiary of General Motors
since 1919, GMAC has extended more than $1.3 trillion in credit to finance more
than 158 million vehicles.
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Forward-Looking Statements
Bank of America
This press release contains forward-looking statements about Bank of America
Corporation. These forward-looking statements involve certain risks and
uncertainties. Factors that may cause actual results to differ include, among
other things, the following: 1) projected business increases following process
changes and other investments are lower than expected; 2) competitive pressure
among financial services companies increases significantly; 3) general economic
conditions are less favorable than expected; 4) political conditions including
the threat of future terrorist activity and related actions by the United States
abroad may adversely affect the company's businesses and economic conditions as
a whole; 5) changes in the interest rate environment reduce interest margins and
impact funding sources; 6) changes in foreign exchange rates increases exposure;
7) changes in market rates and prices may adversely impact the value of
financial products; 8) legislation or regulatory environments, requirements or
changes adversely affect the businesses in which the company is engaged;
9) litigation liabilities, including costs, expenses, settlements and judgments,
may adversely affect the company or its businesses; and 10) decisions to
downsize, sell or close units or otherwise change the business mix of any of the
company. For further information regarding Bank of America Corporation, please
read the Bank of America reports filed with the SEC and available at
www.sec.gov.
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GMAC
In this press release and related comments by General Motors Acceptance
Corporation management may contain forward-looking statements within the meaning
of the federal securities laws. In some cases, you can identify these statements
by our use of forward-looking words such as "may," "will," "should,"
"anticipate," "estimate," "expect," "plan," "believe," "predict," "potential,"
"project," "intend," "could" or similar expressions. In particular, statements
regarding plans, strategies, prospects and expectations regarding the business
are forward-looking statements. You should be aware that these statements and
any other forward-looking statements in this document only reflect expectations
and are not guarantees of performance. These statements involve risks,
uncertainties and assumptions. Many of these risks, uncertainties and
assumptions are beyond our control, and may cause actual results and performance
to differ materially from our expectations. Accordingly, you should not place
undue reliance on the forward-looking statements contained in this information.
These forward-looking statements speak only as of the date on which the
statements were made. We undertake no obligation to update or revise publicly
any forward-looking statements, whether as a result of new information, future
events or otherwise.
Contacts:
GMAC:
Joanne Krell
313.665.2443
Joanne.k.krell@gm.com
Bank of America:
Bob Stickler, Corporate Communications
704-386-8465
Kevin Stitt, Investor Relations
704.386.5667
Lee McEntire, Investor Relations
704.388.6780