FCA to raise billions of debt for the first time since Ferrari IPO/Spinoff

[AlexB]

Big difference this time, FCA isn't mortgaging off the assets of Chrysler (think Trademarks, IP, Physical property and Tooling) like they did doing the first 6 years of FIAT-Chrysler relationship (FCA didn't get done paying that off until 2018).This is all Unsecured monies (just FCA's promise of repayment),

FIAT Chrysler Automobiles NV plans to repay part of a multi-billion euro credit facility via a new bond sale of up to 1 billion euros ($1.1 billion), in a move that will signal the debt market’s level of confidence in the Italian-American carmaker.



Fiat Chrysler will likely issue a bond worth between 750 million euros to 1 billion euros by the end of month, people familiar with the matter said, to repay the first tranche of a loan obtained in March. Ultimately, the company aims to repay the whole 3.5 billion euros via bond issuance. The sale will be its first in Europe for four years.

Fiat Plans to Issue $1 Billion Bond to Repay Credit Line

Fiat Chrysler Automobiles NV plans to repay part of a multi-billion euro credit facility via a new bond sale of up to 1 billion euros ($1.1 billion), in a move that will signal the debt market’s level of confidence in the Italian-American carmaker.

www.bloomberg.com

FCA is the last of the ''Legacy Michigan Three'' to tap the ''Capital'' markets of the World:GM borrowing $4 billion of subprime/junk debt today

 

[Bili]

What do you think about this?

 

[AlexB]

What do you think about this?

Surprise at how slow FIAT Chrysler have been to do such action. Ford raise unsecured $8-$9 billion at 8.5%-9.62 interest which is a bit high:Ford issues $8 billion debt securities after virus causes $2 billion loss. Boeing raised $25 billion unsecured at basically under 5% Boeing bonds reprice in secondary after jumbo issuance.
GM's new bonds are nearly 7% interest, so I under stand FCA doing some interest rate shopping, but the downside is running the risk of getting shut out of the capital markets. Thankfully, both FCA, and the Capital markets are in significantly better shape than 2008/2009.