A few hundred million dollars in loans to Chrysler have been sold off by one of its creditors at a deep discount of about 61 cents on the dollar, new Thursday reports reveal. This is the latest move in the automaker’s struggles whose sales have fallen by 14 percent in the first quarter of 2008 compared to last year.
The sale of the majority of Chrysler by Daimler to Cerberus was funded in part by a $7-billion term loan by J.P. Morgan, Bear Stearns, Goldman Sachs, Citi and Morgan Stanley.
Since November, the banks were struggling to sell off part of their loans, with the offer hitting an all-time low due to a weaker U.S. auto market than analysts predicted back in May. On Wednesday, several hundred millions of dollars in Chrysler debt was sold by one of these underwriters to an unnamed investor group near 61 cents on the dollar, according to Reuters. In November, the underwriters wished to unload about $4 billion at closer to 97 cents on the dollar, then for between 74 and 76 cents on the dollar in March.
The automaker has taken measures in recent months to cut costs and bring up its sales, through 0 percent financing, job cuts and summer plant closures.
