Chrysler to Announce Bailout Repayment Tuesday
PRNewsFoto/Chrysler Group LLC, Jim Fets(DETROIT) -- Chrylser is expected to formally announce Tuesday the repayment of the $7.5 billion bailout loan it received from taxpayers, the Wall Street Journal reports.
Chrysler chief executive Sergio Marchionne and White House advisor on manufacturing Ron Bloom will make the announcement during a visit to a Sterling Heights, Mich. auto plant Tuesday.
Just two years ago, the auto maker was forced to file for bankruptcy. But last week, Chrysler entered into a loan and bond deal with private banks making it possible for the company to repay U.S. taxpayers sooner than expected.
The deal includes $3.2 billion in bonds, $3 billion in a term loan and a $1.3 billion revolving credit facility, according to the Wall Street Journal. Italian auto manufacturer Fiat will help to complete the payment with $1.3 billion cash to Chrysler.
Chrysler reportedly paid $1.2 billion in interest on the loan last year, but WSJ reports the new deal will allow the company a new rate below 10 percent, saving it $300 million a year.
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