UPDATE: Treasury Makes $1.5 Bln Loan To Chrysler Financial
16 Januar 2009 - 7:59PM
Dow Jones News
By Greg Robb
WASHINGTON (Dow Jones) -- The Treasury Department announced
Friday that it will make a $1.5 billion loan to Chrysler Financial
to finance new auto loans.
In a statement, the department said the loan was part of a
broader program to make the domestic auto industry more financially
viable.
Many Republicans are not happy that Treasury is using funds set
up to rescue the financial industry to aid General Motors Corp (GM)
and Chrysler.
They have asked President-elect Obama not to use any more funds
to help specific industries.
So the Chrysler loan could be viewed as squeaking just under the
deadline.
The Treasury said its five-year loan will be made to a special
purpose entity created by Chrysler Financial.
It will be secured by a pool of newly originated consumer
automotive loans.
Chrysler Financial had increased its appeal to gain the funds in
recent weeks after GMAC LLC, the lender associated with General
Motors received $6 billion in bank bailout funds in December.
The injection comes after General Motors and Chrysler, which is
a division of buyout shop Cerberus Capital Management, succeeded in
obtaining $17.4 billion in capital injections.
Of that package, $9.4 billion has been allocated to General
Motors on Dec. 29. Chrysler has received $4 billion on Dec. 29,
according to the term sheet and the auto giant expects an
additional $4 billion from the second half of the $700 billion
package expected to be released by Congress.
Click here to go to Dow Jones NewsPlus, a web front
page of today's most important business and market news, analysis
and commentary. You can use this link on the day this article is
published and the following day.