Chrysler Repays Outstanding TARP Loans – Six Years Early!

Chrysler Group LLC today repaid its outstanding Troubled Asset Relief Program (TARP) loans. Its repayment comes six years before the scheduled maturity of those loans in 2017. 

Chrysler repaid $5.1 billion in TARP loans and terminated its ability to draw a remaining $2.1 billion TARP loan commitment. In total, the U.S. Treasury Department has received $1.5 billion in interest and fees from Chrysler, including $865 million associated with today's transaction.
 
Treasury committed a total of $12.5 billion to Chrysler under TARP’s Automotive Industry Financing Program (AIFP). With today's transaction, Chrysler has returned more than $10.6 billion of that amount to taxpayers through principal repayments, interest, and cancelled commitments. Treasury continues to hold a 6.6 percent common equity stake in Chrysler. As previously stated, however, Treasury is unlikely to fully recover its remaining outstanding investment of $1.9 billion in Chrysler.
 
When President Obama took office, the American auto industry was on the brink of collapse. The president decided to provide support to General Motors and Chrysler on the condition that all stakeholders make the sacrifices necessary to fundamentally restructure those companies and put them on a path to viability. By conservative estimates, providing this support and preventing the abrupt liquidation of GM and Chrysler saved more than 1 million American jobs. Moreover, the expected costs of TARP’s support for the industry have come down dramatically over the last two years as the auto industry has continued to recover and strengthen.
 
Today, the American auto industry is growing stronger and creating new jobs. For the first time since 2004, all three American automakers have an operating profit. Since GM and Chrysler emerged from bankruptcy in June 2009, the industry has added more than 115,000 jobs – the industry’s strongest period of job growth in more than a decade.
 
Lazard served as the Treasury Department's exclusive financial advisor on today’s transaction.​