Chrysler Corp. said on Tuesday its finance subsidiary won an extension of a crucial $6.8 billion credit line, led by Chemical Bank and Swiss Bank.
Negotiations were completed after the two remaining holdouts in Chrysler's 152-bank group - Huntington Bancshares Inc., Columbus, Ohio, and First Fidelity Bancorp., Lawrencville, N.J. - agreed to the extension. Neither bank would comment.
As reported, the two-year extension required the unanimous consent of the lenders.
The credit line, originally set to expire next year, was extended through August 1995. As of June 30, Chrysler had drawn down $5.4 billion of the $6.8 billion line.
A Pricier Package
In return for the extension, the banks won additional fees, a substantially higher interest rate, more restrictive covenants, and security interests in Chrysler Financial Corp's. U.S. assets.
The new borrowing rate is 200 basis points over the London interbank offered rate, an increase of 150 basis points.
Under the amended bank agreement, the size of the credit by $2 billion over the next three years.
The continued availability of the credit line became a critical issue for Chysler after it got shut out of the capital markets.