Chrysler is preparing to announce details of a $3.5 billion bond offering. Those funds, along with $1.3 billion in cash from Fiat and a $2.5 billion term loan, will be used to pay back the two government loans.
Fiat has previously expressed a desire to own a larger stake in Chrysler, and paying down this debt is the bridge it needs to cross to make that happen. Right now, Fiat owns 46 percent of the American automaker, but rumor has it that the Italians want 51 percent by year's end, and possibly as much as 70 percent at some point in the near future. For now, however, Fiat is showing that it's dedicated to returning Chrysler to a position of success.