DETROIT — Ally Financial recently announced the opening of an exchange offer for its outstanding 8.3 percent senior guaranteed notes that are due 2015. Company management originally issued an aggregate principal amount of $2 billion of the old notes in a private offering on Feb. 12.

In connection with the sale of the old notes, Ally explained that it entered into a registration rights agreement. This agreement meant the company undertook an offer to exchange the old notes for new notes registered under the Securities Act of 1933.

Pursuant to an effective registration statement on form S-4 and filed with the Securities and Exchange Commission, Ally contends holders of the old notes will be able to exchange the old notes for new notes in an equal principal amount.

"The new notes are substantially identical to the old notes, except that the new notes have been registered under the Securities Act and will not bear any legend restricting transfer," Ally executives pointed out.

"The registration rights and additional interest provisions pertaining to old note holders will also not apply to the new notes," they added.

Ally indicated the exchange offer is set to expire at midnight ET on Nov. 18 unless extended or terminated. The company insisted tenders of old notes must be made before the exchange offer expires and may be withdrawn any time prior to expiration of the exchange offer.

Executives also stated the terms of the exchange offer are set forth in a prospectus dated Oct. 21.

"This announcement is neither an offer to buy nor a solicitation of an offer to sell any of the company's securities," Ally officials warned.

"The exchange offer is being made only pursuant to the exchange offer documents, which have been filed with the SEC, and include the prospectus and letter of transmittal that are being distributed to holders of the old notes," they concluded.