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November 22, 2007 |
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CHRYSLER LLC: Cerberus Postpones US$4 Bln Debt Sale, Source Says The sale of Chrysler LLC's US$4 billion loans has been postponed indefinitely, a source familiar with the matter told The Wall Street Journal, without specifying any timetable for a possible resale. According to Reuters, citing an unidentified source, the latest postponement was prompted by weak credit markets and worsening news from the U.S. automotive sector. JPMorgan Chase and Co., Citigroup Inc., Goldman Sachs Group Inc., Morgan Stanley and Bear Stearns & Co. had planned to sell the loans at about 97.5 cents on the dollar this week, in an aim to lessen US$171 billion in leveraged loan backlog, the TCR- Europe reported on Nov. 9, 2007. The banks, sources said, were eager to dispose the US$10 billion loans that they were not able to sell in July and August after Cerberus Capital Management acquired Chrysler from former owner DaimlerChrysler AG. As reported in the TCR-Europe on July 4, 2007, Fitch Ratings has initiated rating coverage on Chrysler LLC by assigning these ratings: -- Long-term Issuer Default Rating 'B+'; -- US$10 billion first-lien loan 'BB+/RR1'; -- US$2 billion second-lien loan 'BB+/RR1'. The US$12 billion in senior secured financing will be raised following the pending acquisition of 80.1% of Chrysler's parent, Chrysler Holding LLC, by affiliates of Cerberus Capital Management, L.P. The 'RR1' Recovery Rating is based on Fitch's expectation of full recovery in the event of bankruptcy. The Rating Outlook is Stable. The sale, which was previously postponed once, will push through depending on market conditions, a source told WSJ. Headquartered in Auburn Hills, Michigan, Chrysler LLC -- http://www.chrysler.com/ -- produces Chrysler, Jeep(R), Dodge and Mopar(R) brand vehicles and products. The company has dealers worldwide, including Canada, Mexico, U.S., Germany, France, U.K., Argentina, Brazil, Venezuela, China, Japan and Australia. Chrysler is a unit of Cerberus Capital Management. * * * As reported in the Troubled Company Reporter on Oct. 31, 2007, Standard & Poor's Ratings Services said its corporate credit ratings on Chrysler LLC and DaimlerChrysler Financial Services Americas LLC remain on CreditWatch with positive implications, following the United Auto Workers' narrow approval of the new Chrysler-UAW labor contract. The ratings were placed on CreditWatch on Sept. 26, 2007, based on S&P's belief that Chrysler would reach a deal similar to the one General Motors Corp. reached with the UAW on that date. As reported in the Troubled Company Reporter on Aug. 8, 2007, Standard & Poor's Ratings Services revised its loan and recovery ratings on Chrysler LLC (B/Negative/--), including a 'BB-' rating to the US$5 billion "first-out" first-lien term loan tranche. This rating, two notches above the corporate credit rating of 'B' on Chrysler LLC, and the '1' recovery rating indicate S&P's expectation for very high recovery in the event of payment default. S&P also assigned a 'B' rating to the US$5 billion "second-out" first-lien term loan tranche. This rating, the same as the corporate credit rating, and the '3' recovery rating indicate S&P's expectation for a meaningful recovery in the event of payment default. Moody's Investors Service has affirmed Chrysler Automotive LLC's B3 Corporate Family Rating, and the Caa1 rating of the company's US$2 billion senior secured, second lien term loan in connection with the closing of DaimlerChrysler AG's sale of a majority interest of Chrysler Group to Cerberus Capital Management LLC. |
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Today's Top Stories have been selected from the Troubled Company Reporter - Europe. To receive the Full TCR-EUR please CLICK HERE.
