Chrysler Gets Another $1.5 Billion From Government
The government will lend $1.5 billion to Chrysler Financial to increase the availability of loans for car buyers, the Treasury Department announced today, The Post's Binyamin Appelbaum reports.
The company, which provides financing for buyers of Chrysler vehicles, will create a special entity to receive the funds.
The five-year loan carries a modest interest rate and is secured by the loans that Chrysler Financial makes. Treasury also will get warrants for 5 percent of the loan amount.
The deal requires Chrysler Financial to slash its bonus pool for senior executives by 40 percent, among other restrictions on executive compensation.
Here are the terms of the deal.
The government already has given a boost to GMAC, the auto financing company that makes loans to many buyers of General Motors vehicles.
Chrysler's private-equity owner, Cerberus Capital, owns 51 percent of GMAC, with GM holding the remaining 49 percent.
The Bush administration has now committed about $380 billion from its financial rescue program, including almost $25 billion for the automotive industry.
Chrysler already has received a $4 billion emergency loan from the federal government to stay in business.
January 16, 2009; 1:51 PM ET
Categories: The Ticker | Tags: Big Three, Chrysler, automakers, bailout
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