Ally Financial Inc., the auto lender rescued by the U.S. government during the 2008 financial crisis, raised $2.38 billion in its initial public offering after pricing the shares at the bottom of the proposed range.
The U.S. Treasury Department, Ally’s majority shareholder, sold 95 million shares for $25 apiece, according to data compiled by Bloomberg. The stock will start trading on Thursday, listed on the New York Stock Exchange under the symbol ALLY.
The IPO marks the end of a three-year process for Detroit-based Ally, which originally filed to go public in March 2011 as it sought to pay back the remainder of the U.S. bailout that swelled to $17.2 billion. Ally CEO Michael Carpenter has refocused the company on its auto-lending roots after the money-losing mortgage business went bankrupt.
U.S. Treasury will pare its stake in Ally to about 17% through the IPO from about 37%, according to the prospectus. Treasury owned as much as 74% of the company after the bailout.
The offering and repayment to taxpayers will lift some of the added regulatory restrictions that came with the government’s aid and allow Ally to take on more risk that could boost profitability.
While the auto lender is going public following the best year for U.S. initial public offerings since the financial crisis, recent stock-market volatility may affect the shares. The Standard & Poor’s Financial Sector Index slipped 2.6 percent through yesterday after reaching a five-year high on April 2. Ally, the former subsidiary of General Motors, also faces challenges as carmakers including GM and Toyota Motor Corp. face setbacks related to product recalls.
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