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

Article by Christian Andrei, 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

Login or Create new account to add a comment!

Recommended

BMW’s 550i xDrive has long been considered as one of the most successful business sedans in the world. For the brand, this may not be enough as it has officially...
by - January 20, 2017
Amazon is now moving beyond the four corners of online retailing. Only recently, the retail giant has been awarded a patent for its Road Network system. Since the patented technology...
by - January 20, 2017
The newest version of the Lamborghini Huracan is not a Superleggera, but a Performante. When Lamborghini filed for a patent for a new name, there were still debates whether this...
by - January 20, 2017
What is hotter and more menacing than a Hellcat? If we ask Dodge, its answer would be the “Demon.” Of course, we aren’t talking about a demon with horns and...
by - January 20, 2017
The 2018 model year could be an exciting year for fans and enthusiasts of the Chevrolet Corvette. This comes as the 2018 version of the Corvette is bound to feature...
by - January 19, 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