Friday, May 6, 2011

Chrysler refinancing: some investors are not convinced

If the American people seem to have welcomed the idea that the Chrysler Group extinguished its debt to the U.S. Treasury, investors should refinance that debt seem to bend a little 'nose. To write it in no uncertain terms and the Financial Times, which showed that some bankers met two days ago in New York have expressed some concern about providing a loan.

The main point is that most of the new loan would not develop the company but would only pay back previous loans. Now time is running out, since the billions of dollars that Sergio Marchionne was aimed to collect on the plate should be made within ten days as follows: 2.5 billion of "junk bonds" (bonds by high performance, but characterized by a high risk for the investor) and 1.5 billion of credit lines "rotary" (by the company in order to obtain an advance bank offers as subject to pledge a sum of money).

The maneuver Marchionne is conceptually quite simple: replace the expensive loans made by the governments of the United States and Canada with cheaper finance, taking advantage of the boom in place in the markets. To be especially perplexed is a pension fund of the state of Indiana in 2009 that already had lost $ 17 million with Chrysler, where rescued by the Fiat group had not yet been perfected.

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