NEW YORK (Reuters) - Chrysler Group LLC
A bank meeting is set for 1 p.m. ET on Thursday to launch the credit facility that refinances the VEBA note, which was part of the company's settlement with the United Auto Workers Union (UAW). The automaker filed for bankruptcy in April 2009.
The package also includes up to $2.7 billion in senior debt securities.
The refinancing follows the completion of Fiat S.p.A.'s acquisition of Chrysler. Last week, Fiat bought from the VEBA Trust the remaining 41.5 percent stake in the U.S. automaker that it did not already own.
The JP Morgan-led loan is split between a $1.75 billion term loan B, and a $250 million incremental term loan B.
The $250 million incremental term loan B will be fungible with the company's existing term loan B due May 2017. The new $1.75 billion term loan B will mature in December 2018.
In December 2013, Chrysler's $2.93 billion term loan B due May 2017 was priced at LIB+275 with a 75bp Libor floor. The loans were issued at par.
Chrysler is requesting lender commitments by February 4.
Chrysler did not comment immediately.
The Voluntary Employees Beneficiary Association Trust note, also known as the VEBA Trust note, was issued by the automaker as part of a settlement agreement with the UAW in June 2009. The senior unsecured note had a face value of $4.587 billion. The note was slated to back the medical costs of Chrysler's union-member retirees.
The loans and the bonds will rank pari passu with Chrysler's existing secured senior notes and senior secured credit facilities.
Fiat's acquisition of the U.S. automaker, finalized on January 21, consisted of a special distribution paid by Chrysler Group of $1.9 billion, and a cash payment by Fiat North America LLC to the VEBA Trust of $1.75 billion. Chrysler Group funded the special distribution from available cash on hand. Fiat also funded its $1.75 billion payment from available cash.
Wednesday, Fiat announced that the Board of Directors of Fiat decided to establish Fiat Chrysler Automobiles N.V., organized in the Netherlands, as the parent company. Fiat Chrysler Automobiles (FCA) common shares will be listed in New York and Milan.
(Editing By Lynn Adler and Leela Parker)
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