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DATE News (chronologically)
11/21/07
industry news
Bankers fail to sell Chrysler debt loans
Chrysler LLC's bankers failed to sell $4 billion of loans that backed the purchase of the automaker by Cerberus Capital Management LP, according to investors briefed on the decision. JPMorgan Chase & Co. notified the potential buyers Tuesday, said the investors, who declined to be named because terms weren't public.

The failure marks the second time buyers have refused the debt from the banks. Chrysler's lenders were stuck with $10 billion of loans when they were unable to find investors to help finance the acquisition in August of 80.1 percent of Auburn Hills-based Chrysler from Daimler AG of Stuttgart, Germany.

JPMorgan, Citigroup Inc., Goldman Sachs Group Inc., Morgan Stanley and Bear Stearns Cos., all of New York, revived plans to sell the debt earlier this month at 97.5 cents on the dollar, according to people with knowledge of the effort.

The LCDX Series 9 index, a gauge of confidence in the U.S. high-yield, high-risk loan market that falls as investor sentiment worsens, has dropped 2.8 percent to 95.70 since the end of October, according to Markit Group Ltd. in London.

Chrysler agreed to repay $3 billion of financing it received at the time of the acquisition, one of the underwriters said, and the banks planned to hold $3 billion on their books. "From a credit-rating perspective, there's very minimal impact on Chrysler," Standard & Poor's Ratings Services analyst Gregg Lemos Stein said of the problems selling the debt. "The deal was underwritten." Spokeswomen Tasha Pelio of JPMorgan and Jennifer Sala of Morgan Stanley declined to comment. Spokespeople for Citigroup, Goldman Sachs, Bear Stearns and New York-based Cerberus didn't immediately return telephone calls for comment. Detroit News
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