It's Official: Chrysler has announced that it has repaid its multi-billion dollar obligations owed to both the United States and Canadian governments. Adding up both loans plus interest, Chrysler has just shelled out a tidy $7.6 billion. The U.S. receives $5.9 billion and Canada will get $1.7 billion.

Chrysler was able to secure new means of financing, which allows the automaker to pay off its government obligations a full six years ahead of the original payment schedule. While this new financing still involves debts, it saves Chrysler an estimated $350 million per year in interest. This move also allows Chrysler to remain liquid, with more than $10 billion in assets ready to roll.

Under the direction of the U.S. government, Chrysler partnered up with Fiat, and the goal was to bring smaller, more fuel-efficient vehicles to the states. Yet as an opinion piece in The Detroit News sagely reminds us, it wasn't really the smaller cars that helped Chrysler, but the newly refreshed sport utility vehicles. The all-new Dodge Durango and Jeep Grand Cherokee models helped push sales up 17 percent in 2010.

Regardless of how they got there, this move should serve to instill confidence in the U.S. car-buying public. Chrysler continues to add new or redesigned vehicles to its lineup and has a strong media campaign behind those vehicles. Will high gas prices slow the positive momentum that Chrysler has built up, or is this the chance for the Fiat portion of the relationship to step up and shine? Sound off in Comments, and check out the full press release posted after the jump.
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Chrysler Group LLC Completes Refinancing and Repays U.S. and Canadian Government Loans in Full
More than six years ahead of schedule, Chrysler Group fulfills promise to taxpayers and repays original government loans totaling $6.7 billion, in addition to $1.8 billion of interest and other consideration
Intervention by U.S. and Canadian governments and strategic alliance with Fiat leads to 16 all-new or significantly refreshed vehicles currently in dealerships; more than $3 billion in facility upgrades; and increased employment with the hiring of 6,000 Chrysler Group employees
Company's return to profitability and double-digit worldwide sales increases show new product lineup gaining momentum in marketplace


May 24, 2011 , Auburn Hills, Mich. -
Chrysler Group LLC today announced the repayment of $7.6 billion in outstanding U.S. and Canadian government loans following the completion of new refinancing transactions. The original loans were repaid in full, more than six years ahead of schedule, along with the payment of accrued interest and additional consideration.

Today, the Company made payments of $5.9 billion to the U.S. Treasury (UST) and $1.7 billion to Export Development Canada (EDC) to retire the loans granted when Chrysler Group began operations in June 2009. EDC is the holding company through which the Canadian federal and Ontario provincial governments extended loans to Chrysler Group.

The Company borrowed $5.1 billion from the UST and $1.6 billion from the Canadian governments in June 2009 ($2.6 billion from the original loan facilities was undrawn and the facilities will be canceled). In total, Chrysler Group has paid the UST $6.5 billion and the EDC $2.0 billion, including $1.8 billion in interest and additional consideration.

"Less than two years ago, we made a commitment to repay the U.S. and Canadian taxpayers in full and today we made good on that promise," said Sergio Marchionne, Chief Executive Officer, Chrysler Group LLC. "The loans gave us a rare second chance to demonstrate what the people of this Company can deliver and we owe a debt of gratitude to those whose intervention allowed Chrysler Group to re-establish itself as a strong and viable carmaker.

"Paying back the loans, along with the financial community's investment in our refinancing packages, marks another step in the Company returning as a competitive force in the global automotive industry."

Chrysler Group confirmed the completion of new financing transactions consisting of a term loan totaling $3.0 billion, debt securities totaling $3.2 billion and a revolving credit facility of $1.3 billion. The new financing will save Chrysler Group an estimated $350 million a year in interest expenses.

The Company used the net proceeds from the term loan and bonds, together with $1.3 billion from an equity call option exercised by Fiat for an incremental 16 percent fully diluted ownership interest, to repay the government loans. The revolving credit facility remains undrawn.

Chrysler Group continues to have more than $10 billion in liquidity after the refinancing and loan payoffs, which includes the undrawn revolving credit facility.

"Everyone in the extended Chrysler Group family, from employees to union partners to dealers and suppliers, have worked tirelessly to deliver on our promises and to win back public trust in the Company and our products," said Marchionne. "There is more work to be done as we remain focused on fulfilling the goals outlined in our 2010-2014 business plan."

Goldman, Sachs Co. advised Chrysler Group on structuring the financings and Evercore Partners advised the Company's Finance Committee.


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  • 85 Comments
      reattadudes
      • 4 Years Ago
      if we could only repost the comments from here on Autoblog back when GM and Chrysler got the government "bailouts" in 2009. comments were about 98% against the loans, with all the "wise and experienced" posters saying we would never see a nickel back. the American manufacturers were dead; stick a fork in 'em. we got to hear all of the posters' stories at how bad American cars are, including inspiring interjections by pimple-faced high schoolers who ran their $300 rusty Chevy Citations out of oil, and then complained about the car. and what a difference two years makes; Chrysler pays back ALL of the money borrowed from both the US and Canadian Governments WITH INTEREST. GM will be doing the same thing in a few weeks. the two companies are making record profits, and are more viable and competitive than ever. I can remember back in 1985, when Lee Iacocca did exactly the same thing, basically thumbing his nose at all of the naysayers when Chrysler paid their loans back SEVEN YEARS EARLY. all countries helped their home country manufacturers when the market tanked back in 2008, contrary to what the legions of the uninformed believed. the British, French, Italian, German, Australian, Swedish, Japanese, and Korean governments gave (please note GAVE) billions to their auto manufacturers to keep them solvent. here in the US, we LOANED the money with interest. that's a huge difference. congratulations, Chrysler! I knew you could do it.
        • 4 Years Ago
        @reattadudes
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          pinyatapbjtime
          • 4 Years Ago
          seriously, it's not chrysler paying the government back. isn't it another company, paying for chrysler?
          • 4 Years Ago
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        quuppa70
        • 4 Years Ago
        @reattadudes
        "the British, French, Italian, German, Australian, Swedish, Japanese, and Korean governments gave (please note GAVE) billions to their auto manufacturers to keep them solvent." are you sure about this? Im not sure if Italy gave any money....
          Jonathan Arena
          • 4 Years Ago
          @quuppa70
          The USA was not formed to escape communism... lol.
          • 4 Years Ago
          @quuppa70
          [blocked]
          • 4 Years Ago
          @quuppa70
          [blocked]
        axiomatik
        • 4 Years Ago
        @reattadudes
        FYI - GM already paid back their loans.
          Ben
          • 4 Years Ago
          @axiomatik
          Nooo, you were ranked down for stating an incorrect fact,
          axiomatik
          • 4 Years Ago
          @axiomatik
          That's funny. Down-ranked for stating a fact.
      Jorvis
      • 4 Years Ago
      Does anyone else find that banner to be in very poor taste? If you have to borrow money from a family member because of hard times, you don't dress it up and throw a pay-back party. It should be a humbling thing. Chris Rock once talked about dads who brag "I take care of my kids!" - You're supposed to! You don't publicly pat yourself on the back for things you were supposed to do anyway.
        • 4 Years Ago
        @Jorvis
        [blocked]
        autoplaybook
        • 4 Years Ago
        @Jorvis
        Right. Like it's in poor taste to celebrate when you pay down your credit card or student loan debt. When you pay off your first new car, etc... ...they've got "government-owned" off their shoulders and are celebrating their viability as a company. What, exactly, is wrong with that?
          Jorvis
          • 4 Years Ago
          @autoplaybook
          Actually, at least for myself, I wouldn't celebrate (where others could see) when I paid down a credit card or paid off a car. I actually did both this year and was ecstatic, smiled, sighed with relief, and carried on with my life. I didn't post on Facebook or get shirts imprinted that I had done it - it's a personal accomplishment. Being publicly proud about paying off a debt (to me) is like being excited you told someone you were sorry - it would have been better to have not been in that position in the first place. For a company battling a public-image fight I completely see both yours and John Blaze's point though. It seems like a less tasteful thing they simply have no choice but to do. It's just sad that their taking on the debt was front-page news everywhere, while their paying off the debt will be on page 3 usually, at best. People like bad/scandalous news more.
          montoym
          • 4 Years Ago
          @autoplaybook
          Well, if you paid off that credit card, or student loan with another type of loan, then yes, that would be in poor taste in my opinion. You didn't pay off anything, you just swapped one loan for another. Perhaps a better loan, but still a loan. If you didn't read the story, that's exactly what happened here. They are saving $350Million in interest each year and that's great. But the are still on the hook for $7.6Billion. Am I glad they paid back the Feds? Sure, just as you appear to be. Am I under the impression that their now free of that debt? Absolutely not, it still exists, just owed to someone else now. So, what exactly was paid off here, please enlighten me. Your comparison is completely inaccurate.
          axiomatik
          • 4 Years Ago
          @autoplaybook
          Jorvis - you probably don't depend on public opinion for your very survival, either. Corporations need good PR. Bad PR has already cost them a lot of sales.
        EvilTollMan
        • 4 Years Ago
        @Jorvis
        Couldn't have said it better.
        Blue Pariah
        • 4 Years Ago
        @Jorvis
        Jorvis, I see where you're coming from but you've got to put it in context. This sign is inside of an assembly plant - not flying off the roof of Auburn Hills (Not yet anyway...) It sign has more to do with internal morale than it does announcing it to the world. It's congratulating the employees for their hard work, making the feel like they're part f something. This is the kind of thinking that's been lacking in Detroit - the employees matter. It doesn't matter whether anyone at this plant actually had something to do with the loan payback, but its good for HR. This kind of thing can be mostly smoke and mirrors, but its the little things like this that helps keep morale in check..
          Curtis
          • 4 Years Ago
          @Blue Pariah
          Blue Pariah, I couldn't have said it better!
        MechE
        • 4 Years Ago
        @Jorvis
        You have a point but its just a banner so I dont put much emphasis on it. I wasn't really enthused about the gov't handing out money, mainly because when they did I felt like the companies didnt have to pay it back. To hear the gov't is paid back makes me feel like Chrysler didnt rob taxpayers. Waiting for these financial institutions to do the same.
      • 4 Years Ago
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        • 4 Years Ago
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      • 4 Years Ago
      [blocked]
        • 4 Years Ago
        [blocked]
        Mike K
        • 4 Years Ago
        People have been doing this for decades, where have you been??
          You guy
          • 4 Years Ago
          @Mike K
          How do you think the economy got this f***ed up in the first place?
        axiomatik
        • 4 Years Ago
        "Hey honey, let's consolidate our student loans, we'll also get a lower interest rate." Doesn't sound so bad now, huh? Way to over-simplify a complex situation into a sound bite.
        V
        • 4 Years Ago
        it's more like, let's pay off this credit card with a lower interest loan. At least it's better than GM's "pay your taxes with a credit card idea"
      Manuel Ruiz Zamora
      • 4 Years Ago
      whare are the guys that said chrysler suck and its dead
        bobmarley
        • 4 Years Ago
        @Manuel Ruiz Zamora
        Chrysler did suck and they would have been dead. No one could have said they knew this was going to happen. Hindsight is 20-20 except in your case you obviosly dont remember the crap they made for the last dacade...sebring, caliber, avenger Dont get me wrong I want to see made in USA on everything I buy but I also want it to be worth my money!
      • 4 Years Ago
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        • 4 Years Ago
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          tump
          • 4 Years Ago
          Well said, Mr. Blaze. A lot of people here (and on the Right) simply don't believe in the common good - that what's good for your neighbor is also good for yourself. It's good for you that your neighbors are healthy. It's good for you that your neighbors are employed with a living wage. It's good for you that people will go out of their way to help someone else. I'm simply tired of the "me me me me" attitude from the right.
        tinted up
        • 4 Years Ago
        Yeah good thing Obama singlehandedly saved the auto industry. I heard he personally executed Bin Laden as well. Oh and I also heard that Obama had a cave installed under the White House which he uses as a base for fighting crime at night.
          • 4 Years Ago
          @tinted up
          [blocked]
        MTU 5.0
        • 4 Years Ago
        It's the worst economic recovery since the Great Depression, but yeah, other than that, things are great! ;) http://www.usatoday.com/news/nation/2011-05-19-job-creation-recession_n.htm While it's good to see U.S. automotive jobs saved, all is not well on the American economy front, near or long term.
          axiomatik
          • 4 Years Ago
          @MTU 5.0
          It's been a long term trend. The last several recessions have had increasingly slow job creation. After the 2001 recession (ended November 2001), unemployment didn't even peak until June 2003, 19 months after the end of the recession. In fact, the unemployment rate didn't even get down to the November '01 rate until sometime in 2004.
        • 4 Years Ago
        [blocked]
          • 4 Years Ago
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          axiomatik
          • 4 Years Ago
          Bush only lent the automakers enough money to last a few months. He didn't want to see them go bankrupt during his presidency, but he also didn't want to do what was necessary to truly 'save' them. It is interesting that at the height of the crisis, conservatives lambasted Obama for 'socializing' America through 'illegal' bankruptcies, claiming that the automakers should just be left to die. But now that the automakers are relatively healthy, it was all thanks to Bush.
      Dane Grant
      • 4 Years Ago
      Chrysler does not have small fuel efficient cars... So what hype are they selling? Their small cars don't sell, like the 200, 300 or the trucks? Propaganda !.!.!
        Mike K
        • 4 Years Ago
        @Dane Grant
        uninformed opinion is uninformed.
        DrEvil
        • 4 Years Ago
        @Dane Grant
        @ Dane Grant - Newsfalsh: Most Americans WILL NOT buy those small fuel efficient cars that you're talking about. There's a reason why the BEST selling vehicles in America are not the ultra frugal cars you're whining about. F150, Camry, Altima, Malibu, Fusion, Accord, Cruze, Corolla, Civic are the best sellers for the major brands in the US. None of those models are the most fuel efficient cars sold by any of those manufacturers. Where does the Fit rank in comparison to the Accord & Civic? Where does the Fiesta rank in comparison to the F150, Fusion? Where does the Versa rank in comparison to the Altima and Sentra? Where does the Aveo rank in comparison to the Malibu, Cruze, Impala, Silverado? Chrysler has improved each of their products, and their increase in sales shows that people will buy their products. As new models come on line, they will fill out their product portfolio. Are you suggesting that they be shut down until they have such models?
          • 4 Years Ago
          @DrEvil
          [blocked]
        Making11s
        • 4 Years Ago
        @Dane Grant
        It could just be Fiat money.
      tigersharkjr
      • 4 Years Ago
      That is just lovely news, thankfully an iconic American company was kept afloat. I cant believe all of the so called capitalists here that wanted them to go under.
      Bruno Nekic
      • 4 Years Ago
      So Chrysler secured additional financing to pay off the U.S. and Canadian governments which in turn means they did nothing.
        guyverfanboy
        • 4 Years Ago
        @Bruno Nekic
        Saving $350 million a year in interest is nothing? Really now...
          Bruno Nekic
          • 4 Years Ago
          @guyverfanboy
          I really don't care how much interest they saved or get charged, the U.S and Canadian government/people bailed them out and is the reason they a still here which still boggles my mind.
          BrunoT
          • 4 Years Ago
          @guyverfanboy
          Let's say you owe $20,000 on your credit cards and at the end of each month you have $5 left over in your budget. You consider that "success". Then you find a card with a cheaper rate to transfer it to, thinking "score!". Taking your interest rate down a peg is nice, but ultimately you still owe so much money that if anything goes wrong (job loss, illness, car breaks down) you're screwed. Chrysler is in the same boat. When sales drop they probably won't be able to service the debt. So this is good news but not great news. It's better than bad news, I suppose.
      themanwithsauce
      • 4 Years Ago
      Gotta love the ignorance on this website.... Look, with these data recorders it is entirely possible that little miss princess talking on her cell phone through a red light might actually be proven guilty rather than people having to be taken at their word. On top of that, say you are injured in an auto accident and you claim mechanical failure of a part. Well if the black box data clearly shows you had 0% throttle and 100% brake applied yet the scene of the accident shows no efforts to stop the vehicle then you're in the clear. For the ignorant types - simple gps tracking is all big brother ever needed to track you and your speed habits. If you have a gps navigation system or phone then congrats, you've set yourself up. This tech is actually meant to save lives and protect you and your family. We should promote its use and limits on when/how it gets used but stopping it altogether is a step backwards.
      • 4 Years Ago
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      tigersharkjr
      • 4 Years Ago
      This is just lovely news. Thankfully jobs were kept here and an iconic American company was kept afloat. I cant believe people here were wanting them to go under...
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