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Chrysler pays off US, Canadian loans;

by David Zatz on

sergio marchionne

Chrysler announced the repayment of $7.6 billion in U.S. and Canadian government loans, in full, more than six years ahead of schedule. The company paid $5.9 billion to the US Treasury and $1.7 billion to the Canadian authorities to retire loans granted in June 2009.

Chrysler had borrowed $6.7 billion; an additional $1.8 billion was paid in interest and “additional consideration.” Another $2 billion lent to Chrysler under George W. Bush remains part of the liabilities of “Old Carco,” the former Chrysler Group.

The new Chrysler Group has repaid, in total and including past payments, $6.5 billion to the US and $2.0 billion to Canada.

“Less than two years ago, we made a commitment to repay the U.S. and Canadian taxpayers in full and today we made good on that promise,” said Sergio Marchionne, Chief Executive Officer, Chrysler Group LLC. “The loans gave us a rare second chance to demonstrate what the people of this Company can deliver and we owe a debt of gratitude to those whose intervention allowed Chrysler Group to re-establish itself as a strong and viable carmaker.

Chrysler Group confirmed the completion of new financing transactions consisting of a term loan totaling $3.0 billion, debt securities totaling $3.2 billion and a revolving credit facility of $1.3 billion. This, together with a $1.3 billion investment from Fiat for another 16% of the company, will save Chrysler around $350 million per year in interest expenses. Chrysler continues to have more than $10 billion in liquidity after the refinancing and loan payoffs, including an undrawn revolving credit facility.

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