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Fiat Chrysler Automobiles NV plans to repay part of a multi-billion euro credit facility via a new bond sale of up to 1 billion euros ($1.1 billion), in a move that will signal the debt market’s level of confidence in the Italian-American carmaker.

Fiat Chrysler will likely issue a bond worth between 750 million euros to 1 billion euros by the end of month, people familiar with the matter said, to repay the first tranche of a loan obtained in March. Ultimately, the company aims to repay the whole 3.5 billion euros via bond issuance. The sale will be its first in Europe for four years.

The firm hasn’t yet decided whether to issue in U.S. dollars or euros. The unsecured debt won’t be backed by a collateral, the people said, asking not to named because the discussions are private.

A spokesman for Fiat Chrysler declined to comment.

(Also read: EU regulators to decide on $50 billion Fiat-Peugeot deal by June 17)

Auto manufacturers and their parts suppliers have shuttered factories across the world in recent months amid government lockdowns in China, Europe and the U.S., halting sales and wreaking havoc on supply chains.

A successful bond sale would signal a welcome vote of confidence in the carmaker despite the uncertainty caused by the pandemic.

Fiat Chrysler agreed last year to combine with French rival PSA Group to create the world’s fourth-largest automaker by volume, allowing the companies to share the cost burden of expensive new technologies.

(Also read: Fiat Chrysler restarts Brazil production after coronavirus shutdown)

The tie-up may also bolster results by strengthening the partners’ foothold in Europe’s lucrative commercial vehicle business.

Last month Fiat Chrysler drew down its 6.25 billion euros revolving credit facility, originally signed in June 2015 and amended in March 2019. These funds add to 1.5 billion euros drawn down from other bilateral credit facilities.

This story has been published from a wire agency feed without modifications to the text.

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