Chrysler Financial, the automaker's lending arm, will receive a $1.5 billion, five-year loan from the federal government, the Treasury Department announced today.
The U.S. already has agreed to lend up to $6 billion
lending unit, GMAC.
The funds will come from the government's original $700 billion in TARP money.
Chrysler Financial agreed to limits on executive compensation as part of the deal, bloomberg.com reported. Chrysler saw its auto sales fall more than 50% in December.
"The special purpose entity created by Chrysler Financial will issue warrants to Treasury in the form of additional notes in an amount equal to 5% of the total size of the loan. The additional notes will vest 20% on the closing date and 20% on each anniversary of the closing date and will have other terms similar to the loan," the Treasury release stated.
This article was written by a staff member of TheStreet.com.