Chrysler no longer in debt

Thanks to Fiat’s continuing financial support, Chrysler Group LLC has repaid all of the $7.6 billion in loans it owed to the U.S. and Canadian governments. The completion of new refinancing has resulted in all loans and accrued interest being repaid in full more than six years earlier than originally planned. 

“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. Paying back the loans, along with the financial community’s investment in our refinancing packages, marks another step in the Company returning as a competitive force in the global automotive industry,” he added.

After borrowing $5.1 billion from the U.S. Treasury and $1.6 billion from the Canadian government in June 2009, Chrysler Group has made payments of $5.9 billion to the U.S. Treasury and 1.7 billion to Export Development Canada (EDC) to retire the loans. Total payments made were $6.5 billion to the U.S. Treasury and $2 billion to the EDC including $1.8 billion in interest.

The new financing transactions which got the company back in the black consist of a term loan totalling $3.0 billion, debt securities totalling $3.2 billion and a revolving credit facility of $1.3 billion. This funding has come from net proceeds from the term loan and bonds, as well as a $1.3 billion equity call option from Fiat in exchange for an extra 16 percent fully diluted ownership interest. It will reportedly save Chrysler Group an estimated $350 million a year in interest expenses.