NEW YORK (Reuters) -- U.S. automaker Chrysler Group LLC borrowed $6.2 billion to refinance high-cost government loans stemming from its 2009 bankruptcy restructuring, people familiar with the matter said today.
Chrysler borrowed $200 million more than its initial target. The company is operated by Italian automaker Fiat S.p.A.
Chrysler increased the amount of its first-lien term loan to $3 billion from $2.5 billion, the people said. The U.S. automaker's second-lien bonds were cut by $300 million to $3.2 billion.
Meanwhile, Chrysler's revolving credit facility has also been reduced to $1.3 billion from the initially planned $1.5 billion, the people said.
The term loan, bonds and about $1.3 billion in cash from Fiat will be used to repay about $7.5 billion in loans that Chrysler owes to the United States and Canada.
The government loans were part of Chrysler's 2009 bailout after a massive drop in auto sales pushed the company to the brink of collapse. Those loans bear high interest rates, which cost the company more than $1.2 billion last year.
The refinancing will help put the U.S. automaker on firmer financial ground as the company gears up for an initial public offering that could come as early as this year.
Chrysler declined to comment. The company emerged from bankruptcy nearly two years ago under Fiat's management.
Since then, Chrysler has overhauled its vehicle lineup and cut costs. So far the automaker has revamped 16 models and is developing new models that will move the company away from its traditionally truck-heavy lineup.