Chrysler to repay $6.6B of government bailout loan

DETROIT (AP) — Chrysler said Thursday it will take out bank loans and sell debt to repay $6.6 billion in loans that it still owes the U.S. and Canadian governments, a major step toward becoming a publicly traded company again.

The company said it also will use $1.3 billion from Italy’s Fiat SpA, which runs Chrysler, to help repay the government bailout money.

Details of the deal are still being worked out, and terms could be disclosed as early as Monday when Chrysler releases its first-quarter earnings.

The deal would give the governments a big chunk of the money they loaned to Chrysler to keep it operating and exit its 2009 bankruptcy. It also would save Chrysler millions of dollars in interest payments.

In addition, the refinancing is a major step toward an initial public stock offering by Chrysler that could come late this year or in early 2012.

Chrysler Group LLC still owes $5 billion to the U.S. government and $1.6 billion to the Canadian and Ontario governments.

The Auburn Hills, Mich., company said in a statement Thursday that it would sell debt securities to institutional investors in a private offering.