Treasury: Chrysler Has Made $1.9 Billion Repayment
May 17, 2010The Treasury Department said Monday it had received $1.9 billion from Chrysler to settle a $4 billion loan.
The department said that while the $1.9 billion repayment is less than the original loan, the amount is still more than Treasury had expected to recover.
The original loan was made on Jan. 2, 2009, by the Bush administration. At the time, the government was scrambling to provide emergency support to both Chrysler and General Motors and their auto financing arms.
The loan was extended to finance Chrysler LLC, which was later spun off when Chrysler emerged from bankruptcy in 2009. Chrysler Holding, the new parent company, made the repayment Monday.
Treasury said Monday that as a result of the repayment, Chrysler Holding and Chrysler Financial, the auto financing arm of the company, no longer have outstanding obligations to the $700 billion bailout fund, known as the Troubled Asset Relief Program.
The original $4 billion loan went into default when Chrysler filed for bankruptcy in April 2009. In June 2009, the assets of old Chrysler were sold to the holding company as part of the bankruptcy court proceedings.
The Treasury Department made the announcement about the loss from Chrysler on a day when rival automaker General Motors Co. reported its first quarterly profit in nearly three years. That moved GM closer to a stock offering that would repay at least part of the $43 billion it owes the government.
GM said it made net income of $865 million, or $1.66 a share, in the first quarter. That compared with a loss of $6 billion, or $9.78 a share, a year earlier. Debt and other expenses were cut by its stay in bankruptcy court last year. Strong new-model sales also helped, GM said.
(Copyright 2010 Associated Press. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed.)