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 The JP Morgan-led loan is split between a $250 million incremental
term loan B that will be combined with the company's existing term
loan B due May 2017, and a new $1.75 billion term loan B maturing in
December 2018. The loans are expected to price at LIB+275, with a
75bp Libor floor.
Original Issue Discounts (OID) are 99.75 on the incremental term
loan B and 99.5 on the new loan maturing in 2018.
A bank meeting is set for 1 p.m. ET on Thursday to launch the credit
facility that refinances the VEBA note, which was part of the
company's settlement with the United Auto Workers Union (UAW). The
automaker filed for bankruptcy in April 2009.
The package also includes up to $2.7 billion in senior debt
securities.
The refinancing follows the completion of Fiat S.p.A.'s acquisition
of Chrysler. Last week, Fiat bought from the VEBA Trust the
remaining 41.5 percent stake in the U.S. automaker that it did not
already own.
Chrysler is requesting lender commitments for the loans by February
4.
Chrysler did not comment immediately.
The Voluntary Employees Beneficiary Association Trust note, also
known as the VEBA Trust note, was issued by the automaker as part of
a settlement agreement with the UAW in June 2009. The senior
unsecured note had a face value of $4.587 billion. The note was
slated to back the medical costs of Chrysler's union-member
retirees.
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The loans and the bonds will rank pari passu with Chrysler's
existing secured senior notes and senior secured credit facilities.
Fiat's acquisition of the U.S. automaker, finalized on January 21,
consisted of a special distribution paid by Chrysler Group of $1.9
billion, and a cash payment by Fiat North America LLC to the VEBA
Trust of $1.75 billion. Chrysler Group funded the special
distribution from available cash on hand. Fiat also funded its $1.75
billion payment from available cash.
Wednesday, Fiat announced that the Board of Directors of Fiat
decided to establish Fiat Chrysler Automobiles N.V., organized in
the Netherlands, as the parent company. Fiat Chrysler Automobiles (FCA)
common shares will be listed in New York and Milan.
(Editing by Lynn Adler and Leela Parker)
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