Chrysler Repays Government Loans

Just as announced ever since Monday evening, American manufacturer Chrysler signed all the required paperwork today to free itself from the huge government debt it had since 2009. With the help of a few banks, itself and, most of all, Fiat, Chrysler managed to repay the US and Canada, in full, the entire $6.7 billion, plus interest, six years ahead of the deadline.

On Tuesday, Chrysler made a payment of $5.9 billion to the US Treasury and $1.7 billion to Export Development Canada (EDC). An extra $2.6 billion from the original loan facilities was undrawn and the facilities will be canceled.

“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, Chrysler CEO. “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.”

After the repayments have been made, Chrysler was left with $10 billion in liquidity after the refinancing and loan payoffs, including the undrawn revolving credit facility. The cherry on the cake, since Chrysler received the bailout, it managed to return to profitability and post double-digit worldwide sales. From now on, hopes the car maker, the problems should be over, even if all it did was to swap one debt for another.