DETROIT — Ally Financial took another step on Tuesday toward
its full repayment of the U.S. Treasury in moves the company believes "will
further strengthen the common equity base."

Ally entered into agreements with certain investors
providing for a private placement of 166,667 shares of Ally common stock for an
aggregate purchase price of $1 billion.

In connection with the private placement, Ally also entered
into agreements with the Treasury providing for the repurchase by Ally of all the
outstanding shares of the Mandatorily Convertible Preferred (MCP) securities
held by the U.S. Treasury and the termination of the Treasury's existing share
adjustment right.

The company explained the agreement requires the funding of
the private placement to take place no later than Nov. 30, and the private
placement is subject to certain conditions. Those conditions include:

—Receiving a non-objection from the Federal Reserve to the Comprehensive
Capital Analysis and Review (CCAR) resubmission

—The repurchase by Ally of all outstanding shares of the MCP
securities held by the Treasury

—The elimination of the share adjustment right

"These transactions are key steps in Ally's journey toward
repaying the remaining investment by the U.S. taxpayer," Ally chief executive
officer Michael Carpenter said. "Ally has undergone a complete restructuring
and transformation in recent years, from addressing its mortgage risk to
further strengthening its leading automotive finance and direct banking
franchises.

"We are encouraged by the strong investor interest in the
company through the process to raise the additional common equity and believe
it validates the progress that has been made over recent years," Carpenter
continued.

"The actions announced (Tuesday) will clear the way for Ally
to pursue the next steps to ultimately exit the TARP program and enable its operations
to further thrive," he went on to say.

The company pointed out the agreements Ally has with the Treasury
with respect to the MCP repurchase and share adjustment right is subject to
certain conditions, including receiving a non-objection from the Federal
Reserve to the CCAR resubmission and successfully completing the private
placement. 

Upon fulfillment of the conditions, Ally said it will make a
cash payment to the Treasury of $5.2 billion to repurchase $5.938 billion par value
of MCP. 

Further, the company noted a cash payment of $725 million
will be made to terminate the share adjustment right.

Ally pointed out that it has paid the Treasury approximately
$6.2 billion on its investment and upon completion of these transactions,

"Ally will have paid the U.S. Treasury approximately $12.1
billion, more than two-thirds of the investment made in the company," company
officials said.

In an e-mailed statement to Bloomberg published in this
report, Treasury's assistant secretary for financial stability evaluated the
situation.

"Ally has made great progress in restructuring and
strengthening its business in order to repay the taxpayer, and we look forward
to continuing to work with the company to recover the remaining investment," Tim
Massad said.

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