LONDON, Jan 9 (Reuters) - Banque PSA, the financial arm of loss-making French car maker PSA Peugeot Citroen, will sign around 5 billion euros ($6.52 billion) of loans as part of an 18.5 billion euro debt rescue plan in the next few days, bankers said on Wednesday.
The debt rescue package consists of an 11.5 billion euro loan refinancing, which includes the 5 billion euro loan and bilateral loans, and around 7 billion euros of state loan guarantees.
Slumping sales at Peugeot, Europe's second-biggest auto maker, have put the group's finances under strain. The company is shedding assets, cutting 10,000 jobs and closing production capacity to stem mounting losses.
Banque PSA is putting the 11.5 billion euro refinancing package in place to secure funding before a possible downgrade of its credit rating to non-investment grade or 'junk'. A downgrade would increase the bank's funding cost. ($1 = 0.7667 euros) (Reporting by Alasdair Reilly; editing by Keiron Henderson)