Chrysler secured $7.5 billion to repay high-cost government loans

Article by Christian A., on May 19, 2011

Chrysler Group LLC will be able to repay its government debt now that it has secured new financing worth $7.5 billion under a bond offering and term loan. In a statement, Chrysler said that it was able to raise $3.2 billion in bonds, $3 billion in a term loan and a $1.3 billion revolving credit line.

Repayment of government loans will be done through the bonds and the term loan, which amount to $6.2 billion, paired with $1.3 billion in cash from Fiat SpA.

Chrysler said that its $1.3 billion revolving credit facility will be undrawn and will be used for general corporate purposes. Due to its bankruptcy and restructuring in 2009, Chrysler owes $7.5 billion to the U.S. and Canada. In a press release, Chrysler said that the refinancing is scheduled to close on May 24.

Sources say that Chrysler had borrowed $200 million more than it initially intended to. These government loans bear high interest rates, which cost the company over $1.2 billion in 2010.

This refinancing will place Chrysler on a more stable financial ground as it prepares for an initial public offering that may take place as soon as this year.

Since Chrysler emerged from bankruptcy two years ago and was placed under Fiat’s control, the U.S. automaker was able to overhaul its lineup as well as reduce costs.

If you liked the article, share on:

Comments

Recommended

Nissan revealed that the new 2017 Rogue Sport crossover will be priced in the U.S. market at $21,420. Specifically, this is for the front-wheel drive version of the Rogue Sport...
by - April 26, 2017
Remember the E30 BMW M3? Yes, the one from 1990. If you remember it right, it was also the company’s most iconic car and probably one of the best BMW...
by - April 26, 2017
Ferrari is cooking up something interesting for us. The last time they released the 488 GTB was two years ago, followed by a 488 Spider and several versions of it....
by - April 26, 2017
After launching the latest version of the BMW M550i xDrive, the German carmaker is now introducing its diesel counterpart -- the new M550d xDrive (G30/G31). Available either as a sedan...
by - April 26, 2017
A lot of news has been going around about the 2018 Dodge Challenger SRT Demon lately, and people are arguing whether the 840 horsepower vehicle by Fiat Chrysler should be...
by - April 26, 2017
Facebook

Youtube Channel

Tip Us
Do you have a tip for us?
Did you film an important event?
Contact us
Newsletter
Subscribe to our newsletter!
Subscribe
Galleries