JV Aims to Spur Secondary Market in Chile

GMAC-RFC, a Minneapolis-based subsidiary of Residential Capital Corp., has entered into a joint venture with Grupo Security, Santiago, Chile, to expand the secondary market for residential mortgages in Chile.Under the terms of the agreement, GMAC-RFC Chile Inversiones Limitada, a subsidiary of GMAC-RFC, has agreed to purchase a 49% interest in Securitizadora Security SA, a subsidiary of Grupo Security and one of the three largest debt securitization companies in Chile, for approximately $1.25 billion Chilean pesos (about US$2.5 million). The joint venture pact requires Securitizadora Security to raise approximately US$4.5 million in capital through the authorization of Chilean regulator SVS. In addition, Grupo Security, an international financial services company, must subscribe to at least $2 million of the new shares to be issued by Securitizadora Security.