Feb. 20 (Bloomberg) -- GMAC LLC, the lender partially owned by General Motors Corp., is scheduled to announce today that it will close about 75 percent of its auto-financing offices in the U.S. and Canada after losing $2.3 billion last year.

GMAC plans to reduce the number of offices serving U.S. auto dealers to four and eliminate three of four outlets in Canada, according to a letter from Barbara Stokel, executive vice president of North American operations, set for delivery to dealers today. GMAC had 16 regional auto-lending centers in the U.S., according to a May 17 statement.

``Given the recent macro-economic conditions during the past year and anticipated well into 2008, we need to make structural cost reductions to restore our competitive position,'' said Stokel in the letter. GMAC spokeswoman Gina Proia declined to comment yesterday.

The closures mark another setback for GMAC, which was separated 15 months ago so it could borrow at a lower cost than its money-losing parent automaker. The finance unit posted losses in three of four quarters since then.

In a Jan. 22 letter to investors in GMAC's majority owner, Cerberus Capital Management LP, Cerberus founder Stephen Feinberg predicted GMAC may run into ``substantial difficulty'' if credit markets fail to improve.

GMAC's 2007 loss stemmed from declining profit from auto lending and record U.S. home foreclosures that sparked a rise in bad loans and squeezed available credit for consumers.

``The new Regional Business Center alignment will enable us to reduce our cost structure,'' Stokel said in the letter.

The four remaining U.S. offices will be in Dallas, Pittsburgh, Atlanta and Chicago. The lone Canadian office will be in Toronto.

GM Aid

GM injected $1 billion into Detroit-based GMAC to help cover earlier losses at its Residential Capital mortgage unit. GMAC also pumped $1 billion into ResCap during the third quarter to help the lender meet minimum net worth limits set by bankers.

GMAC said most of the restructuring should be complete by the end of the year. Cerberus spokesman Peter Duda said yesterday he had no comment.

GM's results have suffered along with GMAC's mounting losses. For the fourth quarter, GMAC posted a $724 million loss, contributing to a pretax loss of $394 million for GM. For the full year, GMAC's drain on GM was $872 million.

Last year, GM's U.S. sales of cars and light trucks, fell 6 percent from year-earlier levels, compared with 2.5 percent for the industry. GMAC relies on the Detroit automaker for more than 80 percent of its auto loans. GM has about 6,750 U.S. dealers, and at least 750 in Canada, said GM spokeswoman Susan Garontakos.

Cerberus Stake

A group of investors led by New York-based Cerberus bought a 51 percent stake in GMAC from GM in 2006 for $7.4 billion. The automaker hoped to improve GMAC's credit ratings by separating it from GM's own below-investment grade ratings.

GMAC debt is rated below investment grade by Standard & Poor's, Moody's Investors Service and Fitch Ratings.

GMAC's 8 percent bonds due in November 2031 fell 1 cent to 79 cents on the dollar yesterday, yielding 10.4 percent, according to Trace, the NASD's bond-price reporting service. The notes traded at 83 cents and a yield of 9.9 percent in December.

Credit-default swaps on GMAC debt rose 2 basis points to 912 basis points yesterday, according to CMA Datavision in New York. A rise in the price indicates a decrease in the perception of a company's credit quality.

To contact the reporter on this story: Greg Bensinger in New York at gbensinger1@bloomberg.net

Last Updated: February 20, 2008 00:10 EST