Thread: Chrysler repays last TARP loans to U.S. -- six years early

July 21, 2011

Chrysler repays last TARP loans to U.S. -- six years early

By Chris Woodyard, USA TODAY
Updated 31m ago

America's taxpayers are finally off the hook when it comes to Chrysler Group's government loans.

The Treasury Department just announced that it has received $560 million from the sale of its remaining stake in Chrysler Group to Fiat. With the closing of this transaction, Treasury has fully exited its investment in Chrysler Group under the Troubled Asset Relief Program (TARP). Chrysler had received the big TARP loan to keep it afloat as part of its 2009 bankruptcy reorganization.

Fiat paid $500 million to Treasury for its 98,461 shares. Fiat also paid $60 million to Treasury for its rights under an agreement with the UAW retirement trust pertaining to the trust's shares in Chrysler Group.

Chrysler had been anxious to make the deal happen not only for public-relations value, but rather to get rid of interest rates it considered exorbitant.

"With today's closing, the US government has exited its investment in Chrysler at least six years earlier than expected," said Assistant Secretary for Financial Stability Tim Massad. "This is a major accomplishment and further evidence of the success of the Administration's actions to assist the US auto industry."

Chrysler Group repaid $5.1 billion in TARP loans in May and terminated its ability to draw a remaining $2.1 billion TARP loans.

Taxpayers didn't get off the hook entirely in trying to save Chrysler.
The Treasury department says it is unlikely to fully recover$1.3 billion owed by Old Chrysler, the odd name for the entity created through Chrysler's bankruptcy for its old assets. "Treasury has the right to recover proceeds from the disposition of the liquidation trust associated with the bankruptcy of Old Chrysler but does not expect a material recovery from those assets," the department said in a statement.

http://content.usatoday.com/communities ... rs-early/1

RELATED

http://www.alipac.us/f19/fiat-buys-r...illion-294841/

1/1/2014