Chrysler asks court to grant access to its $4.5 billion DIP facility

By Caroline Salls

Pittsburgh, May 1 - Chrysler, LLC requested court approval to obtain $4.5 billion in debtor-in-possession financing from the Department of the Treasury, according to a Friday filing with the U.S. Bankruptcy Court for the Southern District of New York.

A total of $1.8 billion of the financing will be available on an interim basis. The interim hearing is scheduled for May 4.

Interest will be 3% plus the greater of 2% and the Libor rate.

The DIP facility will mature on the earliest of 60 days after the interim commitment conditions are satisfied or waived by the DIP lenders; 35 days after Chrysler's bankruptcy filing if the a final order has not been entered; the effective date of a plan of reorganization or liquidation; upon the acceleration of any DIP loans; and Sept. 30.

On the DIP facility closing date, each DIP lender will receive a promissory note in the amount of 6.67% of its respective commitment, payable on the DIP loan maturity date and accruing interest at the DIP facility rate.

Under the financing agreement, Chrysler is required to file a motion to approve its sale by May 4; accept all bids for participation in the auction by May 20; determine the lead bidder by May 29; receive court approval of the sale by June 1; and close the sale by June 27.

Chrysler, an Auburn Hills, Mich.-based automotive company, filed for bankruptcy on April 30. Its Chapter 11 case number is 09-50002.

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