Chrysler Group LLC, the U.S. automaker owned by Fiat SpA (F), is planning to raise as much as $4.7 billion to repay a note issued to the United Auto Workers retiree health-care trust.
The third largest U.S. automaker may raise $2.7 billion in senior secured debt and an additional $2 billion in loans, the Auburn Hills, Michigan-based company said today in a statement. Proceeds from the sale will be used to repay an unsecured note issued in June 2009 to the voluntary employees beneficiary association trust.
Sergio Marchionne, Chief Executive Officer of Chrysler and its Italian parent Fiat SpA, struck a deal with workers earlier this month to buy a 41.5 percent stake of the carmaker from the trust. Turin, Italy-based Fiat helped rescue the carmaker from bankruptcy almost five years ago.
The new debt will be added on to the company’s 8 percent securities due June 2019 and 8.25 percent notes maturing June 2021, according to a person with knowledge of the offering. The new notes may be priced Feb. 5, said the person, who asked not to be identified because terms aren’t set.
Fiat cut its profit forecast today for this year after posting fourth-quarter earnings that disappointed investors.
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