{"id":405101,"date":"2011-04-28T16:16:43","date_gmt":"2011-04-28T16:16:43","guid":{"rendered":"http:\/\/www.ghanamma.net\/2011\/04\/28\/chrysler-set-to-repay-bailout-loans\/"},"modified":"2011-04-28T16:16:43","modified_gmt":"2011-04-28T16:16:43","slug":"chrysler-set-to-repay-bailout-loans","status":"publish","type":"post","link":"https:\/\/www.ghanamma.com\/2011\/04\/28\/chrysler-set-to-repay-bailout-loans\/","title":{"rendered":"Chrysler set to repay bailout loans"},"content":{"rendered":"
\n

By Chris Isidore, senior writer<\/span>April 28, 2011: 12:16 PM ET<\/span><\/p>\n

NEW YORK (CNNMoney) — Chrysler Group said Thursday it plans to repay the high-interest loans it owes the U.S. and Canadian governments by borrowing money from the private sector.<\/p>\n

The automaker said it will repay the $5.8 billion it owes in loans to U.S. taxpayers, and the $1.7 billion it owes to the Canadians at some point this quarter, once it closes on a new term loan facility and newly issued debt securities to be sold to institutional investors.<\/p>\n

The terms of the new loans are not available, but Chrysler is now paying between 7% and 14% on the U.S. loans, and as high as 20% on some of its Canadian loans, so it could see some significant savings by turning to the private sector for alternative financing.<\/p>\n

In February Sergio Marchionne, the CEO of both Chrysler and Fiat, the Italian automaker that owns a controlling stake in Chrysler, said the company needed to repay “shyster loans<\/a>” to the government.<\/p>\n

He quickly apologized for the remark, admitting that, at the time Chrysler got the government help in 2009, the high rates were appropriate given the risks and lack of alternative lenders.<\/p>\n

Chrysler is due to report first quarter results Monday. It could mark the company’s first profitable quarter since breaking off from DaimlerChrysler back in 2006.<\/p>\n

Repayment of the loans will still leave U.S. taxpayers about $3.5 billion short. Treasury might recoup some of that money when the automaker holds its initial public offering either later this year or early next year. Treasury currently owns 8.6% of Chrysler’s privately-held shares, while the Canadians owe 2.2%.<\/p>\n

But recouping all of that money in the IPO is unlikely, since it would require the company to be worth more than $40 billion in order to have the stake be worth $3.5 billion.<\/p>\n

For comparison, General Motors (GM<\/a>), the nation’s largest automaker, has a market value of $49.7 billion, while more profitable Ford Motor (F<\/a>, Fortune 500<\/a>) has a market value of $57.6 billion. Both are significantly larger than Chrysler.<\/p>\n

Thursday’s announcement on the loan repayment came as U.S. Treasury Secretary Tim Geithner, who is in Detroit for a speech on the economy, was set to tour a Chrysler plant.\u00a0\"To<\/a><\/p>\n

First Published: April 28, 2011: 12:10 PM ET<\/p>\n<\/div>\n

Read the rest here:
\nChrysler set to repay bailout loans<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

By Chris Isidore, senior writer April 28, 2011: 12:16 PM ET NEW YORK (CNNMoney) — Chrysler Group said Thursday it plans to repay the high-interest loans it owes the U.S. <\/p>\n","protected":false},"author":0,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[],"tags":[],"class_list":["post-405101","post","type-post","status-publish","format-standard"],"yoast_head":"\nChrysler set to repay bailout loans - Ghanamma.com<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.ghanamma.com\/2011\/04\/28\/chrysler-set-to-repay-bailout-loans\/\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:title\" content=\"Chrysler set to repay bailout loans - Ghanamma.com\" \/>\n<meta name=\"twitter:description\" content=\"By Chris Isidore, senior writer April 28, 2011: 12:16 PM ET NEW YORK (CNNMoney) -- Chrysler Group said Thursday it plans to repay the high-interest loans it owes the U.S.\" \/>\n<meta name=\"twitter:image\" content=\"http:\/\/i.cdn.turner.com\/money\/images\/bug.gif\" \/>\n<meta name=\"twitter:creator\" content=\"@ghanamma\" \/>\n<meta name=\"twitter:site\" content=\"@ghanamma\" \/>\n<meta name=\"twitter:label1\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data1\" content=\"2 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"Article\",\"@id\":\"https:\/\/www.ghanamma.com\/2011\/04\/28\/chrysler-set-to-repay-bailout-loans\/#article\",\"isPartOf\":{\"@id\":\"https:\/\/www.ghanamma.com\/2011\/04\/28\/chrysler-set-to-repay-bailout-loans\/\"},\"author\":{\"name\":\"\",\"@id\":\"\"},\"headline\":\"Chrysler set to repay bailout loans\",\"datePublished\":\"2011-04-28T16:16:43+00:00\",\"mainEntityOfPage\":{\"@id\":\"https:\/\/www.ghanamma.com\/2011\/04\/28\/chrysler-set-to-repay-bailout-loans\/\"},\"wordCount\":389,\"commentCount\":0,\"image\":{\"@id\":\"https:\/\/www.ghanamma.com\/2011\/04\/28\/chrysler-set-to-repay-bailout-loans\/#primaryimage\"},\"thumbnailUrl\":\"http:\/\/i.cdn.turner.com\/money\/images\/bug.gif\",\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"CommentAction\",\"name\":\"Comment\",\"target\":[\"https:\/\/www.ghanamma.com\/2011\/04\/28\/chrysler-set-to-repay-bailout-loans\/#respond\"]}]},{\"@type\":\"WebPage\",\"@id\":\"https:\/\/www.ghanamma.com\/2011\/04\/28\/chrysler-set-to-repay-bailout-loans\/\",\"url\":\"https:\/\/www.ghanamma.com\/2011\/04\/28\/chrysler-set-to-repay-bailout-loans\/\",\"name\":\"Chrysler set to repay bailout loans - 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