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.
04/10, 3:24 PM
posted by:
rsg
Bold prediction: Chrysler going to be out of business within three years. What a friggin’ disaster they’ve become.
04/10, 3:34 PM
posted by:
mayer_ray_nagin
This article could be taken out of context. The lender may have been cash-strapped and forced to unload the Chrysler debts cheap to someone savvy, conencted, and able to take them on hoping for a flip soon. I know Bear and JP have been in the news for various financial issues, and since that jackass bernanke is taking heat for always bailing out his loaded banker friends at the nation’s expense those banks may have needed to meet a reserve or liquidity target fast.
Let’s face it, gents: LLN writers can barely spell let alone report automotive news accurately. Last thing we should do is trust them to interpret financial dealings.
04/10, 3:36 PM
posted by:
bolex
they are a big mess but i still wouldnt count em out. all these news bits weve been getting about chrysler (layoffs, shutdowns..) are part of restructuring………
04/10, 3:37 PM
posted by:
xkr
haha Chrysler! what a mess
04/10, 3:43 PM
posted by:
johnnycanuck
I’m with bolex on this one. It takes a while to make honey out of a pile of ****.
04/10, 3:44 PM
posted by:
Impulsive
The financial crisis has only BEGUN … you haven’t seen anything yet.
The, once five, big American investment banks will not exist in the present form shortly. Bear’s failure is only the start. Just like the financial tsunami that hit late summer last year, trust me, it gets worse. The next three years will be ugly.
I told you all about the US dollar falling to .72 USDX, and it happened … it will eventually fall to at least .52 USDX. I told you all about oil not going back to $80 … in fact, $125 is coming real soon.
And now I will prognosticate that Chrysler will be bought by the Chinese. Cerberus isn’t stupid.
04/10, 3:51 PM
posted by:
Need more oil for GM
The American Revolution has obliterated Chryslers chances for a comeback. GM’s product line is just too strong, they can out-design, out-engineer and completely out-wit these dumbasses at Chrysler without even breaking a sweat.
Chrysler was finished when those douchbags in Germany destroyed them. Bob Lutz just finished the job. GO look for other employment folks, your company is going down the toilet.
04/10, 4:29 PM
posted by:
elviososa
well….they have today because of their crappy cars.
04/10, 4:50 PM
posted by:
F451
Need more oil for GM,
.
Are you for your countrymen or not? Wishing Chrysler to fail only weakens the US auto industry by becoming more dependent on those left to tend ship. One mistake by the remaining players can spell the beginning of the end. Your American Revolution quickly revolves to American Devolution (the course it is essentially on today). BTW, Lutz is no martyr…far from it.
04/11, 6:24 AM
posted by:
kool_aje
To survive Chrysler needs to produce more green and fuel efficient cars. Call me hypocrit, but a global (not just for USDM) 2.5 L Diesel Challenger (with shorther wheelbase) will be more likely these days….. Believe me, aussies (and europe maybe) are waiting for that…
04/11, 8:56 AM
posted by:
DeansterTJ
The Chrysler lineup needs a design overhaul. The only jewel in the crown (300c) is getting long in the tooth and the rest is a rolling joke (Sebring, Avenger, Caliber, etc).
Would it be so hard to redesign the 300C, design a stylish mid-size sedan and compact, introduce a Miata fighter, and get a real CUV on the road?
04/11, 1:48 PM
posted by:
ricky_b
I’d rather not see any of the Big 3 fail, but where is Chrysler heading? The most fuel thirsty lineup of trucks and SUVs, bland mid-sized and small-sized cars and a toaster for their redesigned minivan. So what if they offer the HEMI in half their product. The base product just doesn’t cut it.
04/12, 11:10 AM
posted by:
abcthemythxyz
yup, chrysler needs more diesels. in fact all the BIG 3 need more diesels more than ever. Look at europe, now they’ve beat japs for fuel economy issue. And the amo is no secret, just a simple clean diesel.