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Ferrari borrows $2.6 billion to finance FCA spinoff

Ferrari announced Monday that it is borrowing about $2.6 billion to finance its spinoff from Fiat Chrysler Automobiles. Here's how it breaks down: Ferrari NV, the automaker's parent company based in the Netherlands, is taking out loans totaling 2.5 billion euros. That's equivalent to $2.64 billion at current exchange rates, and is divided between a term loan of $2.12 billion and a revolving credit facility of $529 million. The larger term loan "will be used to refinance indebtedness owing to Fiat Chrysler Automobiles," among other purposes. That ought to constitute the lion's share of the $2.38 billion which the Prancing Horse marque was, according to reports last year, slated to pay its current parent company in order to help FCA fund its ambitious growth plans. The separate line of credit is earmarked "to be used from time to time for general corporate and working capital purposes of the Ferrari group." Though Ferrari is not expected to take any other Fiat Chrysler properties with it, the "group" in this case would include its various financial services and distribution arms around the world that may have been separately incorporated. As noted in the statement below, the financial arrangement "represents a further step towards the separation of Ferrari from the FCA Group," following the separate stock issues from both companies as independent from each other. FERRARI N.V. SIGNS ˆ2.5 BILLION SYNDICATED CREDIT FACILITY Ferrari N.V. (NYSE: RACE) ("Ferrari") announced today that it has entered into a ˆ2.5 billion syndicated loan facility with a group of ten bookrunner banks. The facility comprises a bridge loan (the "Bridge Loan") and a term loan (the "Term Loan") of ˆ2 billion in aggregate and a revolving credit facility of ˆ500 million (the "RCF"). Proceeds of the Bridge Loan and Term Loan will be used to refinance indebtedness owing to Fiat Chrysler AutomobilesN.V. (NYSE: FCAU) ("FCA") and other indebtedness and for other general corporate purposes. Proceeds of the RCF may be used from time to time for general corporate and working capital purposes of the Ferrari group. The Bridge Loan has a 12 month maturity with an option for Ferrari to extend once for a six-month period. Ferrari intends to refinance the Bridge Loan prior to its maturity with longer term debt, including through capital markets or other financing transactions. The Term Loan, which comprises a majority of the total facility, and the RCF each have a maturity of five years.

Autoblog Minute: FCA hit with record fine, issues recall and buyback

FCA, found in violation of the Motor Vehicle Safety Act, agrees to buyback recalled models as part of record penalties issued by National Highway Traffic Safety Administration. The cars in question are more than half a million Chrysler vehicles with defective suspension parts that could cause cars to lose control, and more than a million Jeeps that are prone to deadly fires. Autoblog's Eddie Sabatini reports on this edition of Autoblog Minute, with expert commentary from Pete Bigelow. Show full video transcript text [00:00:00] FCA faces record penalties as the National Highway Traffic Safety Administration finds the automaker in violation of the Motor Vehicle Safety Act. I'm Eddie Sabatini and this is your Autoblog Minute. Penalties for the automaker include submitting to increased government oversight, a hundred and five million dollar civil penalty, as well as, mandates to buy back defective vehicles from owners and payment for repairs. The cars in question are [00:00:30] more than half a million Chrysler vehicles with defective suspension parts that could cause cars to lose control, and more than a million Jeeps that are prone to deadly fires. Autoblog's Pete Bigelow discussed the NHTSA findings with us. [00:01:00] [PETE BIGELOW INTERVIEW] This fine and buyback recall, combined with the 1.4 million vehicles recalled over remote hacking concerns makes for a rough couple of weeks for FCA. For Autoblog, I'm Eddie Sabatini. Autoblog Minute is a short-form video news series reporting on all things automotive. Each segment offers a quick and clear picture of what's happening in the automotive industry from the perspective of Autoblog's expert editorial staff, auto executives, and industry professionals.

NHTSA preparing to wallop FCA, automaker 'failed to do its job'

As embattled the National Highway Traffic Safety Administration may be, but that certainly doesn't mean it isn't willing or able to put the smack down on automakers that violate its recall procedures. Following a public hearing on Thursday, the government safety arm is preparing what will likely be some very serious punishments for Fiat Chrysler Automobiles. FCA stands accused of mishandling 23 individual recalls covering some 11 million vehicles since 2013, with NHTSA claiming the Italian-American automaker kept it "in the dark," failing to notify the government of safety defects. Uncle Sam also alleges that FCA failed to notify consumers of important safety notices and didn't provide a steady supply of replacement parts. For these charges, the automaker could be fined up to $35 million per recall, which could mean a maximum of $805 million in fines. FCA could also be forced to buy back the unrepaired vehicles. "We have serious concerns with Fiat Chrysler notifications to owners and to NHTSA about its recalls. In every one of the 23 recalls, we have identified ways in which Fiat Chrysler failed to do its job," Jennifer Timian, the head of the Office of Defects Investigation, said during the FCA hearing, The Detroit News reports. The company also "repeatedly failed to provide NHTSA with other critical information about its recalls, including changes to the vehicles impacted by the recalls and its plans for remedying those vehicles." Fiat Chrysler, for its part, didn't really fight back during its hearing, although Scott Kunselman (shown above during the hearing), the senior vice president of vehicle safety and regulatory affairs at FCA, did tell The News that, "We absolutely had no mis-intent." "The plan is to move forward," Kunselman said, adding that the company has "fallen short," and that "some of the things we've done were sloppy." NHTSA administrator Mark Rosekind told The News that the regulator would issue its sanctions by the end of July, adding that he saw no way that FCA could avoid punishment.