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Chrysler Lines up $7.5 Billion to Repay Loans
So here we see that Fiat is again using NONE of their own money to
acquire Chrysler, but instead is floating bonds and loans and just transferring debt from the Gov'e to the private sector. And just because they're doing that, they're being given more and more ownership and control over Chrysler as per the deals negotiated with dago-run Fiat. Fiat will soon walk away with Chrysler, after investing none of their own money, and soon after that they will sell off Jeep and Ram as they stuff north-american Chrysler dealerships with their rolling coffins known as the Fiat-500. To be ****ed and raped by germain Daimler 10 years ago is bad enough. But to have it happen again for Chrysler under dago-fiat is unbelievable. What a sad way to kill what was once such a strong and vibrant American company. ======================= http://abcnews.go.com/Business/wireStory?id=13642187 Chrysler Lines up $7.5 Billion to Repay Loans By DEE-ANN DURBIN and TOM KRISHER AP Auto Writers DETROIT May 20, 2011 (AP) Chrysler Group LLC could repay most of its government loans as early as next week after raising $7.5 billion from bank loans and bond sales. The company said last month that it intended repay the U.S. and Canadian governments during the second quarter. It announced the financial details on Thursday. Chrysler could repay the government as early as Tuesday if the deals close as expected. Under the plan, Chrysler will issue $3.2 billion worth of bonds to investors in two tranches: $1.5 billion in eight-year notes with an 8-percent interest rate and $1.7 billion in 10-year notes with an 8.25-percent interest rate. Chrysler also will take out $4.3 billion in new bank loans, including a $3 billion term loan and a $1.3 billion revolving credit facility. Chrysler had hoped the package would include $3.5 billion in bank loans and $2.5 billion in bonds. But when CEO Sergio Marchionne and other executives went on the road pitching the debt deal in recent weeks, the bonds were popular and interest in loaning money to Chrysler wasn't as strong. Chrysler wanted more loans because they carry a lower interest rate. The Detroit automaker also will use a $1.3 billion investment from Italian automaker Fiat SpA to repay its loans. Fiat, which has had management control over Chrysler since it emerged from bankruptcy protection in 2009, paid that amount last month to increase its stake in Chrysler to 46 percent. Chrysler took $10.5 billion from the U.S. government to survive two years ago, and it has repaid some of the money. The refinancing will allow it to retire a $5.9 billion balance on the U.S. loans and $1.6 billion to the governments of Canada and Ontario. The company has said it is eager to separate itself from the government and improve its image, which was tarnished by the bailout in some customers' eyes. It also has said that the government's interest rates — which average 12 percent — are costing it more than it would have to pay on the open market. The government loans cost Chrysler $1.2 billion in interest last year, or more than $3 million per day. The new loans allow Chrysler to borrow money at 4.75 percent over the London interbank offered rate, subject to a Libor floor of 1.25 percent. That would put its interest rates around 6. Chrysler's action is the latest in the long comeback of the Detroit auto industry after the recession put its future in doubt. General Motors Co. got a $49.5 billion U.S. bailout in exchange for a 61 percent federal equity stake in the automaker after it emerged from bankruptcy protection. The Treasury Department now owns 26.5 percent of GM after selling part of the stake in November. The third of the Detroit Three, Ford Motor Co., didn't seek a bailout. Chrysler spokeswoman Shawn Morgan said Chrysler hasn't announced the date it will repay the government, but it could transfer funds to the U.S. Treasury as early as Tuesday if the deals close as expected. Even with the repayments, Chrysler will still owe the U.S. government around $2 billion. Some of that could be recouped when the government sells its 8.6 percent ownership stake in Chrysler. Fiat has an option to buy the stake, or it could be sold in a Chrysler initial public stock offering that could come later this year or in 2012. Canada got a 2.2 percent stake in Chrysler and could get more cash in the public stock sale. Earlier this month Chrysler announced first-quarter net income of $116 million, its first profitable quarter since 2006. Its sales are up nearly 23 percent this year because of new models, such as the Jeep Grand Cherokee sports utility vehicle. |
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