Treasury, Bondholders Reach Deal On Chrysler Debt

Edward Niedermeyer
by Edward Niedermeyer

The Washington Post reports that the Treasury reached an agreement “in principle” with major Chrysler bondholders last night on the terms of their haircut. Under the deal, $6.9 billion in debt would be paid off with a mere $2 billion in cash once Chrysler completes restructuring. Unlike GM’s debt-swap effort and Chrysler’s UAW VEBA deal, the debt is not being swapped for equity in a reconstituted Chrysler. Which means Chrysler’s lenders would rather walk away with about 28 cents on the dollar than cast their lot in with the New, New Chrysler. The Treasury is still trying to keep Chrysler’s restructuring out of bankruptcy court, but officials emphasize that this deal does not guarantee that Chrysler won’t file. Also, about a third of Chrysler bondholders are still mulling the offer over.

Edward Niedermeyer
Edward Niedermeyer

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  • Menno Menno on Apr 28, 2009

    Yes, GregS; that's what FASCISM does. Government (read: privileged few) have pretty much total control over the money and also take over the companies, not by simply stealing them, but by 'bailing them out' with taxpayer monies (which don't actually belong to them) using debt as an instrument (enslaving / permanently indebting all future American generations for the benefit of the few wealthy / government 'classes' of people in control). Fascism. National Socialism.

  • Landcrusher Landcrusher on Apr 28, 2009

    .28 sounds not too bad to me, but I don't really know the ins and outs. What bothers me is that it sounds like they could take the deal, and then get cut again when a BK happens.

  • Rod Panhard Rod Panhard on Apr 28, 2009

    And if all this "works," Chrysler will be building and selling which cars, again? Oh, minivans. And Pickups. And eventually, Fiats. Right.

  • Tonycd Tonycd on Apr 28, 2009

    Menno, hit the textbooks. You don't know what fascism means. What you're describing is plutocracy, as practiced here for the past eight years. Fascism is not about the distribution of assets; it's the underlying doctrine on the relationship between citizens and their government. Under true fascism, the success of the State itself (not individual citizens, not even all of them) becomes the focus of everyone's goals. A textbook example of this is to strip citizens' rights by passing laws named after "Patriotism" or "Homeland Security." By contrast, the actions of the current administration toward the auto industry -- whether one agrees with them or not -- are avowedly in service of the idea that the nation needs this industry as a job-generating economic engine. This is the diametric opposite of fascist doctrine. The reason you heard so much about "Islamo-Fascism" the last few years is simplicity itself: Republican public-attitude research detected that the public was beginning to correctly attach the F-word to it, so it appropriated the word to pre-empt its use. With some citizens, this language overhaul was evidently successful.

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