Chrysler gets final court OK of modified $4.96 billion DIP, GMAC dealer-financing agreement

By Rebecca Melvin

New York, May 20 - Chrysler LLC was granted final approval of a $4.96 billion debtor-in-possession credit facility from the U.S. Treasury Department and was authorized to obtain post petition financing Wednesday, by the U.S. Bankruptcy Court for the Southern District of New York.

Chrysler was also given approval to enter into a GMAC master transaction agreement, under which Chrysler dealerships will be financed going forward.

The GMAC and U.S. Treasury arrangement was brought before the court as an emergency motion Wednesday.

Chrysler counsel said the company was seeking it on an emergency basis because it is crucial that dealers have financing, particularly at the top car selling season of the year, which includes May and June.

The DIP was increased from $4.1 billion originally requested May 1, of which interim access to $1.4 billion had been granted on May 4, along with $400 million of cash collateral that will fund the company's working capital and general business needs.

Financial modifications included $600 million from Treasury that will go to GMAC LLC under the financing arrangement among Treasury, GMAC, U.S. Dealer Automotive Receivables and Chrysler and $240 million that was transferred back to Canada.

Sixteen objections to the final DIP order had been filed with the court, but those objections had been withdrawn, resolved or overruled, and none of them were heard Wednesday.

As previously reported, interest on the DIP loan will be 3% plus the greater of 2% and the Libor.

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.

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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