ResCap to Start Exchange Offer on $14 Billion of Debt

Residential Capital LLC, the mortgage- finance company owned by GMAC LLC, is offering as little as 80 cents on the dollar to exchange or buy back $14 billion of bonds to stave off bankruptcy.

ResCap, the eighth-largest U.S. residential lender in 2007, will offer cash or notes as part of a tender to start next week, according to a statement today. The exchange will enable Minneapolis-based ResCap to push back maturities until 2010 and 2015, the company said.

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``They had to do something,'' said Mirko Mikelic, a portfolio manager at Fifth Third Asset Management in Grand Rapids, Michigan. Fifth Third has $22 billion in assets under management and doesn't own GMAC or ResCap bonds. ``They are just trying to extend out their maturities and put off any bankruptcy filing. This shows how close they were to filing.''