Official: Chrysler Raises $7.5 Billion to Repay U.S. and Canadian Government Loans
Chrysler raised $7.5 billion to pay back its loans from the U.S. and Canadian governments and the check is expected to clear on Tuesday, May 24. The automaker put the money together by issuing secured securities and establishing new lines of credit.
Chrysler plans to issue $1.5 billion in Notes that will mature in 2019, and $1.7 billion in notes set to mature 2021. In addition, the company has secured a $3 billion term loan and $1.3 billion in revolving credit. The new credit lines total $7.5 billion.
Repaying government loans is likely to impress American taxpayers and is a solid sign that Chrysler is moving toward improved profitability. It will also save the company a huge amount of money, as Chrysler paid $1.2 billion in interest on its government-issued loans last year. More important, the loan repayment means Fiat can up its ownership stake in Chrysler from 30 to 46 percent.