I’m sure there’s a reason why GM’s secured bank lenders are purportedly getting a full recovery of their loans while the Chrysler secured lenders got 29 cents on the dollar. I just can’t come up with it right now.

From the WSJ:

Secured bank lenders to General Motors Corp. would get a full recovery on $6 billion in loans made to the auto maker, under the bankruptcy plan being finalized this week by the U.S. Treasury, two people familiar with the matter said.

The Treasury plans to inject a fresh $50 billion in various financings to back a GM workout, these people said, most of which would take the form of company equity.

The hope is that a reorganized GM would have only about $10 billion to $12 billion in debt once it emerges from bankruptcy, said these people. Previously the government had considered letting GM exit bankruptcy with up to $40 billion in debt, but it determined earlier this month that GM could not handle that amount.

GM currently has about $88 billion in debts and future commitments, including $35 billion in post-employment benefit costs and $20 billion already lent by the U.S. Treasury

To trim GM’s ongoing debt load, the government decided to take on a bigger stake in a reorganized GM — 70% instead of the previously anticipated 50% — while also forcing sharper concessions on the United Auto Workers union than had been projected.

Any suggestions are most welcome.