Banks postpone Chrysler funding plan

[RedEarth]

Source: AP)

NEW YORK (AP) — Investment banks raising funds for the turnaround of Chrysler Group postponed a $12 billion debt offer after investors balked, so they will now fund the bulk themselves to keep the automaker's sale on track, people familiar with the matter said Wednesday.

The banks, which include Goldman Sachs Group (GS) and JPMorgan Chase (JPM), will fund about $10 billion of the deal, said sources familiar with the deal, who could not comment on the record because they were not authorized to speak publicly.

Cerberus Capital Management — the buyer — and DaimlerChrysler (DCX)— the seller — will together fund the other $2 billion. The banks will take a second-lien position behind Cerberus and Daimler, which means that Cerberus and Daimler would collect first in any default.

The move had been expected by Wall Street, as investors have become more reticent to buy into deals because of woes in the home-mortgage market and less demand for high-yield debt.


Read more: http://www.usatoday.com/money/autos/2007-07-25-chrysler-banks_N.htm?csp=15

[Festivito]

1. So, Dan Quayle(Cerberus) collects from, er, before the bank.

Now CONs can setup the banks to take bank's money if the CONs don't run a business well. Is that what I'm seeing?