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WASHINGTON, D.C. — The Department of the Treasury revealed late Monday that it has received a repayment from Chrysler Holding. The amount is a settlement of one of the loans for a fraction of what federal officials extended last year.

The sum of $1.9 billion is only a portion of what Treasury officials doled out to finance Chrysler LLC, what they termed the "Old Chrysler" company. They recapped that the loan was originally made on Jan. 2, 2009 to Chrysler Holding, the parent company of Old Chrysler. It was in the amount of $4 billion.

The Treasury Department reiterated that the loan went into default when Old Chrysler filed for bankruptcy in April 2009.

The repayment that came this week — which Treasury officials admitted is less than face value — is what they described as "significantly more than the Treasury expected to recover on this loan."

The department also acknowledged that the repayment figure also is greater than an independent valuation of the loan provided by investment banking firm Keefe, Bruyette and Woods, which was hired by Treasury in connection with the transaction. 

As a result of the repayment, federal officials indicated CGI Holding and Chrysler Financial no longer have outstanding obligations to the Treasury under the Troubled Asset Relief Program.

The department recollected that back in June 2009, the assets of Old Chrysler were sold to "New Chrysler" pursuant to the bankruptcy court proceeding. At that point, officials stated the loan was reduced by $500 million as New Chrysler assumed that amount of the debt.

They went on to note the liquidation of Old Chrysler was recently completed and did not result in any recovery on the loan. 

The Treasury understood that CGI Holding was the owner of both Chrysler Financial and Old Chrysler. Officials contend the loan also provided for potential recoveries from Chrysler Financial consisting of the greater of $1.375 billion or 40 percent of any distributions that Chrysler Financial made to CGI Holding.

"Because of the uncertainty regarding the amount and timing of any income distributions by Chrysler Financial that would be applied to the loan, Treasury had not expected a material recovery on the loan," officials said in a statement.

Separate from this loan and payment, the department also recounted another involvement with the automaker. Back in January 2009, Treasury also provided a $1.5 billion loan to Chrysler Financial to enable it to finance the purchase of Chrysler vehicles by consumers. Officials emphasized that this loan was fully repaid with interest in July of 2009.

"A separate debtor-in-possession loan of $1.9 billion provided by Treasury to Old Chrysler, on which Treasury had not expected any recovery, was extinguished last month in the liquidation," officials explained.

"Treasury retains the right to recover the proceeds from the sale of specific collateral attached to that loan," they added.

The department wrapped up this recent announcement by stating CGI Holding has no ownership interest in Chrysler Group LLC, the New Chrysler, and Treasury's investments in New Chrysler are not affected by the recent repayment.  Officials mentioned those investments consist of 9.9 percent of the equity and $7.1 billion of loans including undrawn commitments. 

Of the $14.3 billion in loans to Old Chrysler, New Chrysler and Chrysler Financial outstanding at various times under TARP, Treasury said it has received $3.9 billion to date. The department also stated it retains the investments in New Chrysler.

"Total TARP repayments now stand at $189 billion — well ahead of last fall's repayment projections for 2010," federal officials concluded.