Chrysler to repay government loans by end of second-quarter

Chrysler Group LLC - Auburn Hills Headquarters
Chrysler Group LLC - Auburn Hills Headquarters

Chrysler Group LLC today reached reached a debt-refinancing deal that will allow the automaker to repay $6.6 billion in bailout loans from the U.S. and Canadian governments this quarter.

“Chrysler Group LLC announced today that it intends, subject to market and other conditions, to repay in full the outstanding obligations under the loans provided to Chrysler Group by the U.S. Department of the Treasury and the Canadian federal and Ontario governments,” the Auburn Hills company said in a statement. “Chrysler Group intends to complete the repayment during the second quarter of 2011 from proceeds of a new term loan facility and newly issued debt securities to be offered and sold to institutional investors in a private offering exempt from registration under the U.S. Securities Act of 1933.”

Proceeds from a term loan and debt securities sold to institutional investors will be used to repay the debts to the governments.

Chrysler made the announcement ahead of a planned visit by U.S. Treasury Secretary Timothy Geithner to Detroit later today.

– By: Omar Rana