Chrysler LLC's lenders offered to cut the amount they are owed in a proposal to the Obama administration that points to an acceleration in the pace of high-stakes debt restructuring talks, according to two people with direct knowledge of the proposal.

Chrysler's lenders are owed almost $7 billion and face pressure to accept a reduced amount of debt and equity in a restructured automaker ahead of an April 30 deadline for Chrysler to clinch an alliance with Italy's Fiat SpA (FIA.MI).

In their second offer to U.S. officials, which was delivered on Friday, Chrysler's lenders are seeking $3.75 billion in debt and a 40 percent equity stake, according to one of the people who asked not to be named because of the confidential nature of the talks.

The offer represents a $750 million concession compared with the $4.5 billion in remaining debt the Chrysler creditors had asked for earlier this week.

In other concessions, the lenders dropped requests that Fiat invest another $1 billion in Chrysler and that they be given $1 billion in preferred equity in the automaker, one the people with knowledge of the proposal said.

Earlier this week, U.S. Treasury officials offered the Chrysler lenders $1.5 billion in first-lien debt and a 5 percent equity stake.

Representatives of Chrysler and the U.S. Treasury could not be immediately reached for comment.

U.S. officials argued the earlier request from the banks was unreasonable given the trading levels for Chrysler's debt and the most recent estimates of what the lenders could look to recover in bankruptcy, the second source said.

Chrysler's debt is trading near 15 cents on the dollar. Moody's Investors Services has estimated the recovery in a default could be as low as 20 cents on the dollar.

The latest offer from Chrysler's lenders amounts to a request for a payout of about 54 cents on the dollar in remaining debt.

Rep. Gary Peters, a Michigan Democrat whose district includes Chrysler's headquarters, said the latest offer from Chrysler creditors did not go far enough.

Today's offer was still far from reasonable, Peters said in a statement. I am pleased that the pace of negotiations has accelerated and am hopeful that debt holders will accept a fair deal so that Chrysler can avoid bankruptcy and hundreds of thousands of families will be protected.

The committee representing Chrysler lenders includes JPMorgan Chase & Co (JPM.N), Goldman Sachs Group Inc (GS.N), Morgan Stanley (MS.N) and Citigroup Inc (C.N).

One of the sources said Chrysler's lenders still want a seat on the board at a restructured Chrysler as part of a shake-up at the foundering U.S. automaker that is expected to include the departure of Chief Executive Bob Nardelli.

The task force, which is headed by former investment banker Steve Rattner, has said it is willing to invest another $6 billion in Chrysler if the struggling automaker can complete the Fiat alliance and agreements to cut debt and costs with its creditors and major unions.

Chrysler has about $7 billion in first-lien loans that stem from its breakaway from Daimler AG (DAIGn.DE) in 2007. Daimler still holds a stake of nearly 20 percent in Chrysler although it has written down that investment to zero.

Chrysler, which is now 80 percent-owned by Cerberus Capital Management, lost $8 billion in 2008 and has warned it could be forced to liquidate without new funding. (Editing by Andre Grenon)

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