WASHINGTON (Reuters) - The government said on Monday it was pumping $5 billion into auto and mortgage lender GMAC LLC and lending up to $1 billion to automaker General Motors, ensuring the solvency of a company considered crucial to GM's survival.
The Treasury Department said it would buy $5 billion in senior preferred equity with an 8 percent dividend from GMAC. It also said it is lending up to $1 billion to GM to help GMAC reorganize itself as a bank holding company.
The U.S. Treasury Department said it was dipping into a $700 billion bailout fund to buy equity in GMAC and lend to GM, the latest in a string of capital injections aimed at easing the worst credit crisis since the 1930s.
GMAC won Federal Reserve approval to become a bank holding company last week, giving it access to the emergency source of funds and helping it avoid bankruptcy.
The company, co-owned by GM and private equity firm Cerberus
(Reporting by Mark Felsenthal; Editing by Gary Hill)
