UPDATE: Chrysler Financial Drops Request For Additional Funding
18 April 2009 - 2:36AM
Dow Jones News
Chrysler Financial dropped its request for additional federal
aid, saying that it had enough money to cover its short-term
needs.
The company notified the U.S. Treasury Department of its
decision late Thursday night. Chrysler Financial, which provides
car loans to Chrysler LLC, formally asked for a second round of
funding on March 18 after receiving an initial cash infusion of
$1.5 billion in January.
Some loosening in the credit markets and stabilization in the
banks is helping bolster Chrysler Financial's funding, Chrysler
Financial spokeswoman Amber Gowen confirmed. The federal request
had not been officially withdrawn since Chrysler Financial is
trying to keep its options open, she added.
Gowen said the company is still awaiting approval from the
Federal Deposit Insurance Corp. on whether it can become an
industrial bank holding corporation. An industrial bank designation
will allow Chrysler Financial to access more funding from the
federal government. General Motors Corp.'s (GM) GMAC lending
subsidiary became a bank holding company earlier this year.
Chrysler Chief Executive Bob Nardelli said in March that the
finance company needed more money so the auto maker could continue
offering incentives in order to pull more consumers into its
showrooms.
-By Jeff Bennett, Dow Jones Newswires; 248-204-5542;
jeff.bennett@dowjones.com