Chrysler Bailout ReFi Coming Together
With Fiat flying towards taking a majority stake in its Chrysler subsidiary, Reuters reports that the necessary private loans are very close to being arranged.
Goldman Sachs Group Inc, Morgan Stanley, Citigroup Inc and Bank of America Corp are in advanced discussions with Chrysler to finalize a deal that will replace all of its roughly $7 billion government loans with term loans and bonds, these people said on Thursday.
In addition, the banks will also arrange a revolving credit facility for the automaker’s future liquidity purposes that will remain undrawn, these people said. The revolver will not be used for paying down government loans.
Look for Chrysler to wrap up a deal sometime after it reveals its Q1 financial performance next month.
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The revolver will not be used for paying down government loans. Why do you think this sentence was included? Do you think it might relate to Ed Whitacre misleading the public in that famous commercial?
So... this is a good thing, yes? Especially when they pay back a high interest government loan (20% interest rate is what I heard, hence Sergio's "scheister" remark) with a loan with a lot lower rate from a private bank.