The Bank of Nova Scotia said Monday it had agreed to put up $6 billion in a revolving credit facility earmarked for the purchase of loans originated by GMAC.

The credit facility will represent a committed source of funding for up to $20 billion of GMAC retail automotive contracts through October 2010, the bank said in its announcement. The initial purchase of $3 billion will be made later this month, according to the joint announcement by GMAC and the bank.

Joanne Krell, GMAC spokeswoman, said GMAC signed an agreement in July to sell $55 billion worth of its automotive loans to Bank of America during a fi ve-year period. The asset sales have become an important tool for increasing GMAC liquidity and will have no effect on GMAC's plans to return a dividend of about $2 billion to GM.

Khattri also said selling whole loans allows GMAC to redeploy capital to the unit's growing mortgage and insurance businesses while supporting the strategic mission of selling GM's cars and trucks.

"In 2005, GMAC expects to sell $15 billion of auto whole loans through bilateral agreements, multibuyer syndicated structures and full securitizations," he said.

"This agreement is another example of GMAC's move to Œoriginate and sell' assets in order to free up capital from its balance sheet and to redeploy it into higher rate-ofreturn businesses," he said.

The asset sales also offer GMAC a way to get around the fi nancing restrictions that have come with the reduction in GM's overall credit rating. GM's credit rating was reduced to junk last spring by the three major credit rating services.

The Scotiabank Group had combined assets of $266 billion at the end of the third quarter and more than 50,000 employees worldwide, including affi liates. It is also Canada's most international bank, serving customers in some 50 countries around the world.

"We are pleased to add these high-quality U.S. retail assets to our portfolio and to demonstrate our unique capability to meet the needs of clients who operate across Canada, Mexico and the U.S.," McDonald said.

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