Chrysler Group LLC detailed terms of a bond offering and term loan on Thursday that will be used to repay high-cost government loans and put the U.S. automaker on firmer financial ground.

The company expects to refinance the government loans on May 24, the company confirmed in a press release.

In all, Chrysler raised $7.5 billion in new loans: $3.2 billion in bonds, $3 billion in a term loan and a $1.3 billion revolving credit facility, the company said.

The bonds and the term loan, which total $6.2 billion, and $1.3 billion in cash from Italian automaker Fiat SpA will be used to repay $7.5 billion in government loans that stem from Chrysler's bankruptcy restructuring in 2009.

Chrysler's $1.3 billion revolving credit facility will be used for general corporate purposes and will remain undrawn.

A sharp drop in auto sales pushed the Auburn Hills, Michigan-based company to the brink of collapse in 2009 before its federal bailout. It emerged from bankruptcy nearly two years ago under the management of Fiat.

But the loans from the United States and Canada carry high interest rates, which cost Chrysler more than $1.2 billion last year, or more than $3 million a day. Chrysler declined to specify how much the refinancing would save the company.

Chrysler will issue the bonds in two parts: an eight-year tranche worth $1.5 billion and a 10-year tranche worth $1.7 billion. The first part carries an 8 percent interest rate, while the 10-year bond has an 8.25 percent interest rate.

The term loan facility will allow Chrysler to borrow funds at 4.75 percentage points over the London interbank offered rate, subject to a Libor floor of 1.25 percent.

This was the second time this week the U.S. automaker changed the structure of the refinancing package. Initially, Chrysler was looking for a $3.5 billion term loan and $2.5 billion in bonds.

But investor concerns about its financial outlook prompted Chrysler to the cut its term loan earlier this week to $2.5 billion and boost the bond offering to $3.5 billion.

Chrysler also revamped the term loan to include more bond-like features. People familiar with the deal said this week that Chrysler's reworked term loan was oversubscribed.

By Thursday morning, the deal structure had changed again. The term loan was raised to $3 billion, the bond offering was decreased to $3.2 billion and the revolver was cut to $1.3 billion from $1.5 billion.

The refinancing will help the U.S. automaker cut interest costs ahead of an initial public offering that could come as early as this year. Repaying the debt allows Fiat to boost its stake in Chrysler to 46 percent from the current 30 percent.

Sergio Marchionne, chief executive of both Fiat and Chrysler, has said his goal this year is to increase Fiat's stake in Chrysler to 51 percent.

One concern about Chrysler is its line-up which skews heavily to gas-guzzling pickup trucks, SUVs and minivans, said Wilmer Stith, portfolio manager with MTB Investment Advisors.

But he added: You're going marry that with Fiat, which has a lot of good small cars, and so I think the merging of those two is going to be a good thing.

(Reporting by Michelle Sierra and Soyoung Kim; Writing and additional reporting by Deepa Seetharaman; Editing by Lisa Von Ahn, Gerald E. McCormick, Andre Grenon and Phil Berlowitz)