Chrysler Group announced on Friday the long awaited pricing on the Bonds the company plans to issue so that they can refinance government debt. The Bond offering, broken in to two separate issues, totals $3.3 billion. The company plans to sell $1.5 billion in bonds at an 8% interest rate due 2019 and another $1.7 billion carrying 8.25% percent due 2021. Along with these Bonds Chrysler will also be able to access lines of credit worth a combined $4.3 billion.
Chrysler will also receive $1.27 billion from Fiat. The Fiat money will take them from a 30% stake in Chrysler to a 51% stake, making Fiat the majority owner of Chrysler. By repaying the government loans and refinancing them long term, the auto maker can slash interest payments in a dramatic fashion. The company estimates that by paying less interest they will be able to announce quarterly profits instead of lasses.
Getting to profits is an essential part of Chrysler’s plans to go public. The company had indicated that the possibility of going public may happen this fall, but more recent statements make 2012 a more likely situation.