May 5 (Bloomberg) -- Residential Capital LLC, the mortgage- finance company owned by GMAC LLC, said it may not be able to meet debt obligations unless it comes up with an additional $600 million by the end of June.

ResCap, the eighth-largest U.S. residential lender in 2007, today began offering as little as 80 cents on the dollar to exchange or buy back $14 billion of bonds to extend maturities and stave off bankruptcy. To finance the debt restructuring, ResCap is seeking a new $3.5 billion credit line from its parent GMAC, which is owned by General Motors Corp. and an investor group led by Cerberus Capital Management LP.

``There is a significant risk that we will not be able to meet our debt service obligations, be unable to meet certain financial covenants in our credit facilities, and be in a negative liquidity position in June 2008,'' Minneapolis-based ResCap said in a filing to the Securities and Exchange Commission today.

Record U.S. home foreclosures have led to six straight quarterly losses totaling $5.3 billion, eroding ResCap's cash position and pushing it closer to violating loan agreements. ResCap said it's trying to amend the terms of those credit lines.

ResCap also wants GMAC to contribute $350 million of ResCap notes outstanding to the mortgage lender by the end of the month and give it $150 million more in borrowings under an existing credit facility.

Asset Sales

Even if all those actions are successful, ResCap said today it will need ``to consummate in the near term certain asset sales or other capital generating actions over and above our normal mortgage finance activities to provide additional cash of $600 million by June 30.''

The company is already pursuing asset sales to help meet near-term obligations, GMAC spokeswoman Toni Simonetti said today in a phone interview.

``They've got a ton of debt coming due and they have to deal with it whether they like it or not,'' said Mirko Mikelic, portfolio manager at Fifth Third Asset Management in Grand Rapids, Michigan. ``GM has already stepped up but they're not going to want to continue to do that if ultimately ResCap is going to have to file'' for bankruptcy, he said. Fifth Third has $22 billion in assets under management and doesn't own GMAC or ResCap bonds.

ResCap's $1.75 billion of 6.5 percent notes due in 2013 fell 2.5 cents to 52 cents on the dollar at 3:05 p.m. in New York, according to Trace, the bond-price reporting system of the Financial Industry Regulatory Authority. The notes yield 26 percent, or 23 percentage points more than similar-maturity Treasuries, Trace data show.

Bond Exchange

GMAC has already injected more than $2 billion of capital into ResCap. GM, the world's largest automaker, sold a 51 percent stake to the investor group led by Cerberus in 2006 as part of a plan to protect GMAC from the automaker's declining credit outlook.

Fitch Ratings, Standard & Poor's and Moody's Investors Service cut their ratings on ResCap's debt following the bond exchange announced last week.

More than 100 mortgage companies have suspended operations, closed or sold themselves since the start of 2007 amid a housing slump that bankers and real estate trade groups have called the worst since the Great Depression.

ResCap was the nation's eighth-largest home lender in 2007, according to January data from trade publication Inside Mortgage Finance. The year before, at the height of the industry's boom, ResCap ranked 12th among subprime lenders.

Subprime loans are made to people with weak credit and have the highest default rate. Overdue subprime loans set a record last year, leading to a $4.3 billion loss at ResCap.

To contact the reporters on this story: Caroline Salas in New York at csalas1@bloomberg.net; Ari Levy in San Francisco at alevy5@bloomberg.net

Last Updated: May 5, 2008 15:29 EDT