The banks that put up the initial financing – some $7 billion – had anticipated being able to sell it off to investors. But, they’ve been unable to do so, even as they were obliged to lend the money to complete the transaction that allowed Cerberus to purchase Chrysler. Since then, the banks have twice tried to sell all or a large part of the debt, without success, despite discounting the value of it.

That several hundred million dollars worth has now moved at a very low price does not bode well for sale of the balance of the Chrysler debt.

Some of the Chrysler debt is secured by liens on its building and plants. It was not immediately known if the debt involved in this sale was secured or unsecured.

Because Chrysler is now a privately held company, it does not have publicly traded common stock by which to assess the company’s worth or the consensus for its financial future. However, the sale of its debt at such a huge loss for the banks is some indication that the overall market sees Chrysler as an extremely risky investment.

The news simply underscores the serious problems facing Chrysler. It is in an industry with large capital investment requirements and an obsolete product line, and has no access to further capital.

But, someone was willing to be a few hundred million that Chrysler will make it.

Not, however, without a big risk/reward ratio.