As we reported last week, through the help of new loans and an equity option by Fiat, Chrysler was able to repay its loans issued by the U.S. and Canadian governments during the automaker’s 2009 bankruptcy.
The loans have now been paid back in full, with $6.5 billion going to the U.S. Treasury and $2.0 billion to Export Development Canada (a holding company set up by the Canadian government to loan the money), including accrued interest. Under the original loan terms, Chrysler had until 2015 to repay the government loans.
Thanks to the loan payments and refinancing, the company now has $10 billion in liquidity. This new set of financing consists of a $3.0 billion term loan, $3.2 billion in debt securities, and a revolving credit facility of $1.3 billion. The new financing strategy is expected to save Chrysler around $350 million in interest payments each year.
Thanks to a $1.3 billion equity call option by parent company Fiat, Chrysler did not use any of its credit facility. In exchange for a cash payment to help Chrysler complete the loan repayments in full, the Italian automaker has upped its share in Chrysler by 16 percent, bringing its total 46 percent.
This leaves Fiat only five percent short of a controlling stake in Chrysler, which is expected to come when the U.S. government sells off its final stake in the company.