The Chrysler experience suggests that the credit markets are not all doom and gloom right now. A $6 billion leveraged loan to Chrysler was finally syndicated this week, after a lot of angst. It went down the way many predicted. Lenders in the $4 billion range had the most secure tranche--400 basis points over LIBOR and a discount of five percent. The terms of the second-string tranche were even better. The discount will be swallowed as fee reductions by the underwriters, JPMorgan, Bear Stearns, Goldman Sachs, Citigroup and Morgan Stanley. Chrysler still has $12 billion more in loans to sell. So you have to think that people are willing to buy debt, but as a buyer, this is a great time to get buyer-friendly deals. You have to think that similar tinkering is going on with just about every postponed deal. The issue is who are the buyers? To really reflate the deal market, the CLOs need to make a comeback. The real risk is hedge fund investors who get antsy and demand redemptions en masse.  

For more:
- here's the Financial Week article