Chrysler plans to pay off government loans
April 28, 2011 — Chrysler Group intends to fully repay roughly $7 billion in loans from its federal bailout, by the end of June, the company announced Thursday.
The money, provided in 2009 when the automaker was on the brink of closure, is owed to the U.S. Department of the Treasury and the Canadian federal and Ontario governments.
Chrysler said the payment should be complete by the second quarter of 2011 using funding from a new term loan facility and newly issued debt securities to be offered and sold to institutional investors in a private offering. The transaction is exempt from registration under the U.S. Securities Act of 1933, Chrysler said.
Along with the proceeds from the term loan and offering, the automaker said it also plans to use funds from Fiat’s recently exercised option to acquire partial ownership interest in Chrysler to help pay the debt. The completion of the offering, the credit facilities and the Fiat investment are all expected to happen concurrently, Chrysler said.