Chrysler Financial has repaid in full the US$1.5bn of Troubled Asset Relief Program (TARP) government loans, it said in a statement last night.
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The company secured funding last January to support Chrysler LLC in efforts to remain viable and used the TARP loans to fund around 85,000 consumer loans for new vehicles.
The TARP funds were kept separate from other Chrysler Financial operating cash and the balance sheet, the financier said.
“This, and the quality of the assets in the portfolio, provided minimal risk exposure for the US taxpayer during the six-month duration of the TARP loans,” it said.
Funds to repay TARP were obtained through the completion of a AAA-rated automotive asset-backed securitisation (ABS) through the term asset-backed securities loan facility (TALF). The original TARP loan contained provisions that increased Chrysler Financial’s costs over time, providing motivation to pay off the loan as quickly as possible.
Chrysler Financial has no further TARP loans outstanding.
Meanwhile Chrysler Holding LLC has repaid about $280.1m in taxpayer funds that were provided to guarantee its vehicle warranties during its bankruptcy restructuring, the US treasury said.
In a transaction report for the $700bn TARP cited by Reuters, the treasury said the principal repayment extinguished the amount allocated for Chrysler warranty guarantees.
