Chrysler to restructure its proposed refinancing package

Article by Christian A., on May 16, 2011

Chrysler Group LLC may be restructuring its proposed refinancing plan this week after investors displayed doubts over the loan part of the transaction, people who are familiar with the deal disclosed. The company is currently searching for ways to obtain $6 billion in new debt in order to repay government loans.

Since early March, the company’s executives led by Chief Executive Officer Sergio Marchionne have been meeting with potential investors in order to market $2.5 billion of second-lien bonds and a $3.5 billion term loan. The executive team is aiming to complete the loan transaction by May 18.

However, the company may reduce the size of the term loan, as potential investors have been slow to commit after weighing the business prospects of the company and the large size of the facility, according to insiders. The company has been trying to sell one of the largest corporate loans since the financial crisis.

This month, the limits of the loan market have also been tested by the appearance of a variety of other huge leveraged transactions, including a multi-billion dollar agreement with Delphi Automotive.

In addition, the timing of Chrysler’s deal has been complicated further by the process of getting approval from Fiat and the governments of U.S. and Canada, the Wall Street Journal reported last Sunday citing people who are familiar with the situation.

Due to the hesitation of investors, the bank loan part of the company’s refinancing plan is likely to have an interest rate of 5.75 percent, higher than the currently proposed 5.5 percent, the sources added.

If you liked the article, share on:

Comments

Recommended

Not so long ago, the 2018 Genesis G80 Sport made its debut at the 2016 LA Auto Show. But at that time, it did not have a price yet. And...
by - April 23, 2017
It seems like an increase in price has become a trend for automotive companies lately. Genesis isn’t alone when it comes to this. Subaru had just announced that the 2018...
by - April 23, 2017
Imagine a sports car morphing into an SUV. Chevrolet initially revealed the FNR Concept at the previous Shanghai Auto Show in 2015. For this year, Chevy once again graces the...
by - April 22, 2017
From the moment FCA kicked off with its 3-month-long ad campaign until the day it unveiled the new Dodge Challenger SRT Demon, folks have been guessing what the exact figures...
by - April 22, 2017
Some people may think Audi Sport is a new company but it is in fact the motorsport division of Audi combined with the best of what Quattro GmbH can offer....
by - April 21, 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