Chrysler to Repay Government Loans in Q2 2011

A little slower than its brother in bankruptcy, GM, American manufacturer Chrysler announced on Thursday it had secured a new term loan facility that would allow it, combined with the extra money coming from Fiat as a result of the purchase of an extra piece of Chrysler, to repay the loans in has received in 2009 from both the US Department of the Treasury and the Canadian federal and Ontario governments.

According to Chrysler, the repayment of the loans will be made, in full, during the second quarter of the year. The repayment will also include fees and expenses.

“The debt securities will be offered and sold in reliance on an exemption from registration under the Securities Act. The debt securities have not been registered under the Securities Act, or the securities laws of any other jurisdiction, and may not be offered or sold in the United States without registration or an applicable exemption from registration,” said the American automaker in a statement announcing the decision.

Chrysler owes $5.8 billion to the US and $1.7 billion to the Canadian governments, money that ws given to it in 2009, in a bid to save the business and help put it back on track. Chrysler has been in talks with four different banks for a refinancing loan.

Apparently, the confidence Fiat has in the American icon has touched a soft spot with the banks, hence the announcement made by Chrysler. The Italians will soon own 46 percent of Chrysler, 30 handed to them by the US government in exchange for some much-needed Fiat help and 16 percent more purchased by Fiat earlier in the month.