Chrysler Group LLC detailed terms of a bond offering and term loan on Thursday that will be used to repay high-cost government loans and put the U.S. automaker on firmer financial ground.

In all, Chrysler raised $7.5 billion: $3.2 billion in bonds, $3 billion in a term loan and a $1.3 billion revolving credit facility, the company said in a statement on Thursday.

The bonds and the term loan, which total $6.2 billion, coupled with $1.3 billion in cash from Italian automaker Fiat SpA will be used to repay the government debt.

Chrysler's revolving credit facility will be used for general corporate purposes and will remain undrawn.

The Auburn Hills, Michigan-based company owes the United States and Canada $7.5 billion in loans that stem from Chrysler's bankruptcy restructuring in 2009.

The refinancing is expected to happen on May 24, the company confirmed in a press release.

Chrysler will issue the bonds in two parts: an eight-year tranche worth $1.5 billion and a 10-year tranche worth $1.7 billion. The first part carries an 8 percent interest rate, while the 10-year bond has a 8.25 percent interest rate.

The term loan facility will allow Chrysler to borrow funds at 4.75 percentage points over the London interbank offered rate, subject to a Libor floor of 1.25 percent.

(Reporting by Deepa Seetharaman; Editing by Gary Hill)

Chrysler