In a bid to become the world's seventh largest car maker basing on sales, Fiat has announced that it is refinancing a loan valued at 2 billion euros. The move is calculated to allow it to purchase additional shares from Chrysler of which it owns 58.5% already. It needs the loan in order to complete the merger with the American automaker.
The original loan was signed back in 2011. The deal involves nine banks which are the primary backers of the Italian company. In an attempt to reduce the exposure of the main banks involved in the deal, the loan is scheduled for wider syndication. This move would also allow more banks to participate in refinancing of the substantial loan.
Each of the nine banks has committed more than 220 million euros into the agreement. With the wider syndication, each bank's exposure would be cut down by about 70 million euros, which would greatly reduce their risk.
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