Chrysler Group LLC announced the repayment of $7.6 billion in outstanding U.S. and Canadian government loans following the completion of new refinancing transactions.
The original loans were repaid in full, more than six years ahead of schedule, along with the payment of accrued interest and additional consideration.
Today, the company made payments of $5.9 billion to the U.S. Treasury (UST) and $1.7 billion to Export Development Canada (EDC) to retire the loans granted when Chrysler Group began operations in June 2009. EDC is the holding company through which the Canadian federal and Ontario provincial governments extended loans to Chrysler Group.
The company borrowed $5.1 billion from the UST and $1.6 billion from the Canadian governments in June 2009 ($2.6 billion from the original loan facilities was undrawn and the facilities will be canceled). In total, Chrysler Group has paid the UST $6.5 billion and the EDC $2.0 billion, including $1.8 billion in interest and additional consideration.
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. The new financing will save Chrysler Group an estimated $350 million a year in interest expenses.
The company used the net proceeds from the term loan and bonds, together with $1.3 billion from an equity call option exercised by Fiat for an incremental 16 percent fully diluted ownership interest, to repay the government loans. The revolving credit facility remains undrawn.
Chrysler Group continues to have more than $10 billion in liquidity after the refinancing and loan payoffs, which includes the undrawn revolving credit facility.