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June 24 (Bloomberg) — The 300 bankers gathered at New York’s Waldorf-Astoria Hotel last month faced a stark choice: Accept Sam Ramsey’s plea to restructure $60 billion of GMAC LLC’s debt or risk pushing the lending arm of General Motors Corp., the largest U.S. automaker, to the brink of insolvency…

…banks led by New York-based JPMorgan Chase & Co. and Citigroup Inc. provided GMAC and its Residential Capital LLC mortgage unit with the biggest restructuring package since the credit-market rout began a year ago.

Whether that’s enough to ride out the worst housing slump since the Great Depression remains in doubt. Moody’s Investors Service cut GMAC’s credit rating one level to six rankings below investment-grade last week as ResCap burns through cash after losing $5.3 billion in the past six quarters…

Credit-default swap prices give ResCap a 100 percent chance of default within the next five years, based on a JPMorgan model. It was 98 percent before the debt agreement was announced.

Bigger Than Bear

GMAC, started 89 years ago by GM, has 27,000 employees, twice the number that Bear Stearns Cos., the fifth-biggest U.S. securities firm, had when it was rescued in March by JPMorgan.

GMAC’s $250 billion in assets makes it bigger than Countrywide Financial Corp., the biggest U.S. mortgage company by loans, which is being bought by Bank of America.

Investors had speculated that ripple effects from those potential failures could have spread to the rest of the U.S. financial system…

GMAC’s latest rescue effort began May 2 at 6:30 a.m. New York time, when ResCap released a statement saying it would offer as little as 80 cents on the dollar to exchange or buy back $14 billion of bonds to delay maturities and reduce debt…

On June 4, GMAC replaced $6 billion of unsecured revolving credit lines, half of which were scheduled to mature this month, with an $11.4 billion secured revolving credit line that matures in three years. It also renewed a one-year $10 billion commercial paper agreement, and ResCap got a one-year extension on $11.6 billion of bank loans…

“This was as hard and as complicated as anything I’ve done and I’ve been doing this around the clock for 17 years,” said Timothy Pohl, co-head of the restructuring practice at Skadden, Arps, Slate, Meagher & Flom LLP in Chicago, which represented ResCap in the deal. “There were a lot of legitimate concerns about whether it could possibly be accomplished.”

ResCap must still come up with enough cash to repay $3.5 billion of bonds and the $3.5 billion loan from GMAC in 2010. It may find GM and Cerberus unwilling to continue pouring money into it, according to Wasden at Moody’s. ResCap has already returned for capital infusions at least three times in two years.

GMAC’s $2 billion of 7.25 percent debt due in 2011 tumbled 5 cents today to 76 cents on the dollar, the lowest price since March according to Trace, the bond-price reporting system of the Financial Industry Regulatory Authority. The notes yield 19 percent.