The Treasury Dept. has worked out a tentative agreement with Chrysler’s largest secured creditors that, if approved, may help the automaker avert bankruptcy, The NYT reported on Tuesday.
From The NYT: Chrysler has about $6.9 billion in secured debt owned by big banks like Citigroup and JPMorgan… and a group of hedge funds. Under the proposal, all of the debt would be canceled in exchange for $2 billion in cash..
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The proposal is now being reviewed.. [by Chrysler’s biggest secured creditors, which hold about 70% of the co,’s secured debt]…If a deal is reached, it would amount to creditors being paid about 28 cents on the dollar for their outstanding debt. That is a premium to where the debt is currently trading in the market, but much less than the 60 cents on the dollar that creditors originally said they wanted…
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The two sides had been far apart in negotiations ahead of a Thursday deadline, but they have significantly narrowed the gap in recent days.
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