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Strangely, GMAC is not saying a word about the success or failure of its bond-exchange program. The offer to exchange debt for equity expired Friday night but the company has yet to say if it succeeded or failed.

The offer is crucial to GMAC’s transformation into a bank holding company and thus for access to TARP funds. The company had proposed that bondholders convert 75% of their debt into equity. They have extended the offer deadline several times as they continued to fall short.

According to reports, there may be other things afoot.

If GMAC was unable to get the approval of 75 percent of bondholder, it has other options. It could ask the Federal Reserve to allow GMAC to become a bank holding company with less capital.

It might also be possible for G.M. and Cerberus Capital, which owns 51 percent of GMAC, to put more of their own capital into GMAC. Another possibility would be for the Treasury Department to use some of the $700 billion in bailout money approved by Congress to buy preferred shares in GMAC, which would also increase its capital base.

The bailout funds that the Bush administration has approved for GM make little sense if GMAC can’t resurrect itself as a viable entity. Without financing, you can’t sell cars. Don’t be a bit surprised if this little hiccup isn’t finessed by the government.

Source: GMAC: Why the Bond-Exchange Silence?