Ally Bank 2012 Annual Report Download - page 79

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and leases for the life of the underlying asset creating an effective tool for managing interest rate and liquidity risk. We manage the execution
risk arising from secured funding by maintaining a diverse investor base and maintaining capacity in our committed secured facilities. At
December 31, 2012, Ally Bank had exclusive access to $8.5 billion from committed credit facilities. Ally Bank also had access to a $4.1
billion committed facility that is shared with the parent company.
Nonbank Funding
At December 31, 2012, the parent company maintained liquid cash in the amount of $4.2 billion and unencumbered highly liquid
U.S. federal government and U.S. agency securities of $0.9 billion. In addition, at December 31, 2012, the parent company had available
liquidity from unused capacity in committed credit facilities of $7.2 billion, including an equal allocation of shared unused capacity of $3.0
billion from a facility also available to Ally Bank. Parent company funding is defined as our consolidated operations less our Insurance
operations and Ally Bank. Our ability to access unused capacity in secured facilities depends on the availability of eligible assets to
collateralize the incremental funding and, in some instances, the funding also relies on the execution of interest rate hedges. Funding sources
at the parent company generally consist of longer-term unsecured debt, unsecured retail term notes, committed credit facilities, asset-backed
securitizations, and a modest amount of short-term borrowings. To optimize use of cash and secured facility capacity between entities, Ally
Financial lends cash to Ally Bank from time to time under an intercompany agreement. Amounts outstanding on this loan are repayable to
Ally Financial at any time. The parent company has total available liquidity of $15.6 billion at December 31, 2012, which includes the
intercompany loan of $1.6 billion. The total available liquidity amount at December 31, 2012 also includes $1.7 billion of availability that is
sourced from certain committed funding arrangements generally reliant upon the origination of future automotive receivables over the next
twelve months.
During 2012, we completed five transactions totaling $3.6 billion in funding through the U.S. debt capital markets. We will continue to
access the unsecured debt capital markets on an opportunistic basis to help pre-fund upcoming debt maturities. In addition, we have short-
term and long-term unsecured debt outstanding from a legacy retail term note program known as SmartNotes. This program generally
consisted of fixed-rate instruments with fixed-maturity dates ranging from 9 months to 30 years that were issued through a network of
participating broker-dealers. During 2012, we launched a new retail term note program known as Ally Term Notes. There were $7.9 billion
and $9.0 billion of combined retail term notes outstanding at December 31, 2012, and December 31, 2011, respectively.
We also obtain unsecured funding from the sale of floating-rate demand notes under our Demand Notes program. The holder has the
option to require us to redeem these notes at any time without restriction. Demand Notes outstanding were $3.1 billion at December 31, 2012,
compared to $2.8 billion at December 31, 2011. Unsecured short-term bank loans also provide short-term funding. At December 31, 2012, we
had $167 million in short-term bank loans, a decrease of $1.4 billion from December 31, 2011. Refer to Note 15 and Note 16 to the
Consolidated Financial Statements for additional information about our outstanding short-term borrowings and long-term unsecured debt,
respectively.
Secured funding continues to be a significant source of financing at the parent company. During 2012, the parent company completed
automotive-related transactions that included the renewal and extension of $22.3 billion of committed secured funding capacity, the creation
of incremental private secured funding capacity totaling $7.1 billion, and $2.4 billion in public term securitizations in Europe and Canada. In
January 2013 we completed a public retail securitization using the Capital Auto Receivables Asset Trust (CARAT) platform, our first since
2008, raising more than $1.5 billion. We continue to maintain significant funding capacity at the parent company to fund automotive-related
assets, including a $7.5 billion syndicated facility that can fund automotive retail and commercial loans, as well as leases. In March 2012, this
facility was renewed by a syndicate of nineteen lenders and extended such that half of the capacity will mature in March 2013 and the other
half will mature in March 2014. In addition to this facility, there are a variety of others that provide funding in various countries. At
December 31, 2012, the parent company had $30.3 billion of exclusive commitments globally in various facilities secured by automotive
assets. The parent company also had access to a $4.1 billion committed facility that is shared with Ally Bank.
Recent Funding Developments
In summary, during 2012, we completed funding transactions totaling more than $28.0 billion and renewed key existing funding
facilities as we realized access to both the public and private markets. Key funding highlights from 2012 and 2013 to date were as follows:
• We accessed the unsecured debt capital markets in February, June, August, and December of 2012 and raised $3.6 billion.
• In 2012, we have continued to access the public asset-backed securitization markets completing eleven U.S. transactions that raised
$11.8 billion. Included within the total amount is Ally Bank's inaugural term lease transaction in the U.S. totaling $1.3 billion in
funding. Additionally, we completed European and Canadian (retail and dealer floorplan) transactions that raised $1.9 billion and
$516 million, respectively.
• We created $7.1 billion of new private capacity to fund automotive assets.
• We renewed and extended more than $22.0 billion of key automotive funding facilities. The automotive facility renewal amount
includes the March 2012 refinancing of $15.0 billion in credit facilities at both the parent company and Ally Bank with a syndicate
of nineteen lenders. The $15.0 billion capacity is secured by retail, lease and dealer floorplan automotive assets and is allocated to
two separate $7.5 billion facilities, one of which is available to the parent company and a Canadian subsidiary while the other is
available to Ally Bank. Half of the capacity matures in March 2013 and the other half matures in March 2014. We are currently
working on the renewal of the $15.0 billion facility and expect to reduce the total capacity.
Table of Contents
Management's Discussion and Analysis
Ally Financial Inc. • Form 10-K