Chrysler launches $3.5 billion term loan at Libor plus 400-425 bps

By Sara Rosenberg

New York, May 4 - Chrysler Group LLC launched its $3.5 billion six-year term loan on Wednesday with price talk of Libor plus 400 basis points to 425 bps with a 1.25% Libor floor and an original issue discount of 99 to 991/2, according to a market source.

The loan includes 101 soft call protection for one year.

The company's $5 billion senior secured credit facility (Ba2/B+) also provides for a $1.5 billion five-year revolver.

Morgan Stanley & Co. Inc., Citigroup Global Markets Inc., Goldman Sachs & Co. and Bank of America Merrill Lynch are the lead banks on the deal, with Morgan Stanley the left lead on the term loan and Citi the left lead on the revolver.

Proceeds, along with $2.5 billion in secured notes, will be used to repay all of the company's loans provided by the U.S. Department of the Treasury and the Canadian federal and Ontario governments.

Other funds for the repayment will come from $1.3 billion of proceeds from the recently announced exercise by Fiat of an option to acquire an incremental ownership interest in Chrysler.

Completion of the credit facility, debt offering and equity investment by Fiat are expected to occur concurrently in the second quarter.

Chrysler is an Auburn Hills, Mich.-based producer of Chrysler, Jeep, Dodge, Ram, Mopar and Fiat vehicles and products.

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