Chrysler renews credit facilities but cuts amount

NEW YORK (Reuters) - Chrysler LLC's finance arm said on Sunday it had renewed its credit facilities, but had reduced the amount to $24 billion from $30 billion due to tough credit markets and changes in its retail strategy.

Chrysler Financial said 90 percent of all banks that were part of the original financing participated.

Citigroup (C.N), JPMorgan Chase (JPM.N) and Royal Bank of Scotland (RBS.L), led the syndication of the loan facilities.

Chrysler Financial will use the credit facility as a source of funding to make loans to Chrysler dealers financing inventory of unsold vehicles in showrooms and to make loans to consumers financing vehicle purchases.

Those loans are then typically bundled up and sold to investors in the asset-backed securities market.

Last month, Chrysler, which is majority-owned by private equity firm Cerberus Capital Management CBS.UL, said the financing arm would stop offering vehicle leases.

On Friday, the auto maker said the decision to suspend lease financing, a risky form of vehicle financing that has saddled Chrysler's U.S. rivals with large losses, had been a positive move in negotiations with its bank syndicate.

Chrysler did not specify the interest rate it was paying on the financing. Chrysler Chief Financial Officer Ron Kolka said on Friday the financing cost would be higher because of the tighter credit markets.

Chrysler Financial spokesman Bill Porter said $24 billion raised in the refinancing was sufficient because of the company's decision to abandon lease financing.