NEW YORK -- A Chapter 11 filing by Chrysler is likely to cause minimal damage to the broader $577 billion leveraged loan market.
While its creditors will take a significant hit, the Chrysler loans were never broadly syndicated, which helps limit more widespread damage. Chrysler has 46 creditors, with four banks holding roughly 70% of the loans.
"It's a pretty unique situation and not a surprise in the loan market," said Meredith Coffey, senior vice president of research at the Loan Syndications and Trading Association.
Other market participants concurred, saying heavy government involvement in negotiations makes it difficult to use Chrysler as a gauge for future loan performance.
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