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Chrysler lenders talk to U.S. to cut debt-sources

Fri Apr 3, 2009 6:01pm EDT

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NEW YORK, April 3 (Reuters) - Chrysler LLC's lenders are in talks with the U.S. government to reduce the automaker's debt by swapping some of it out for equity, new debt or a lesser amount in cash, sources familiar with the talks said on Friday.

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The lenders, JPMorgan Chase & Co (JPM.N), Citigroup (C.N) Goldman Sachs Group Inc (GS.N) and Morgan Stanley (MS.N), are open to working out a deal. The discussions are moving quickly, with several different offers from the government on the table, the sources said

All four banks declined comment, as did Cerberus Capital Management CBS.UL, which controls 80.1 percent of Chrysler. (Reporting by Jui Chakravorty and Megan Davies)

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