Chrysler tapped a $2bn credit line from its owners, Cerberus Capital Management and Daimler, to bolster the auto maker’s liquidity amid a painful downturn in US sales that is stretching its resources, reports the WSJ. The move, which had been expected, comes as Chrysler enters perhaps its toughest stretch since Cerberus bought a majority stake in August 2007. The drawing of the $2bn loan was required as part of the agreement Cerberus and Daimler signed when Cerberus bought its stake a year ago. Daimler will provide $1.5bn, with the rest coming from Cerberus. The loan is due in 2014. On Friday, Moody’s lowered its outlook on the ratings of the three Detroit car manufacturers, owing in part to liquidity concerns.

This entry was posted by Gwen Robinson on Wednesday, June 25th, 2008 at 5:32 and is filed under Capital markets, Private equity. Tagged with cerberus, chrysler, Daimler. Edit this entry.