by Bill McBride on 4/21/2009 04:13:00 PM
Tuesday, April 21, 2009
Pier loans: Bridge loans that couldn't be sold.
From the WSJ: Bankers Rebuff U.S. on Chrysler Debt
Chrysler owes ... lenders, which include banks such as Citigroup Inc. and J.P. Morgan Chase & Co., about $6.9 billion. But President Barack Obama and his auto team had demanded that the banks cut that to $1 billion, while gaining no equity stake in a restructured Chrysler.Chrysler is probably worth more dead than alive - at least to these debt holders. That complicates the negotiations.
In their five-page counteroffer, the lenders said they are prepared to cut Chrysler's first-lien debt by $2.4 billion, or down to about $4.5 billion, in exchange for a minority equity stake, likely to be 35% to 40% ...
The lenders have told Treasury ... they could recover at least 65% of their loans to the company if it is liquidated in bankruptcy.
Nine days to go ...
Posted by Bill McBride on 4/21/2009 04:13:00 PM