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WASHINGTON -- The U.S. Treasury Department has reached a tentative debt-reduction agreement with Chrysler's main creditors but still must get other lenders to sign on for the deal to take effect, three people with knowledge of the talks said today.
The accord with JPMorgan Chase, Citigroup, Goldman Sachs and Morgan Stanley would reduce Chrysler's $6.9 billion debt to $2 billion, which would be repaid by Chrysler in cash, they said.
For the deal to become formal, all of Chrysler's lenders have to agree. The group, comprised of about 45 banks and hedge funds, has until Thursday to sign on to the agreement under the deadline imposed by the Obama administration for Chrysler to forge an alliance with Italy's Fiat S.p.A. and qualify for $6 billion in additional U.S. aid.