FARMINGTON HILLS, Mich.
– Chrysler Financial announced July 15 it has repaid in full the $1.5 billion of Troubled Asset Relief
Program (TARP) government loans.
The company originally secured TARP funding in January of this year to
support Chrysler LLC in its efforts to remain viable. Chrysler Financial used
the TARP loans to fund more than 85,000 consumer loans to support the sale of
Chrysler, Jeep and Dodge vehicles for Chrysler LLC.
The TARP funds were kept in a separate special purpose vehicle, and unlike
other TARP recipients, those funds were never co-mingled with Chrysler
Financial’s operating cash or balance sheet. This, and the quality of the
assets in the portfolio, provided minimal risk exposure for the
U.S.
taxpayer
during the six-month duration of the TARP loans.
Funds used to make the repayment of TARP were obtained through the
completion of a AAA-rated automotive asset-backed securitization (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 for the company to pay off the loan as quickly as
possible. As a result of this transaction, Chrysler Financial will have no
further TARP loans outstanding.