Fiat Chrysler Automobiles NV late on Thursday priced a $3 billion debt offering that will provide the car maker with funds likely to be used to refinance debt.
A $1.5 billion five-year bond will pay a coupon of 4.5% while an equal amount of an eight-year bond will pay 5.25%. Fiat said the funds will be used for general corporate purposes including possibly refinancing debt held by FCA US, formerly known as Chrysler Group LLC.
FCA US has an outstanding $3 billion bond that can be repaid with a penalty as of June 15 that has a coupon of 8%.
Sergio Marchionne, Fiat Chrysler’s chief executive, has said repeatedly that he plans to pay back the FCA US bond as soon as possible. Some of the U.S. unit’s liquidity can’t be accessed by Fiat Chrysler until it has paid back that bond and another one for $3.2 billion that can be extinguished in June next year.