US: Ford completes debt restructuring initiatives

Ford Motor Company has announced the successful completion of debt restructuring initiatives that will reduce Ford's Automotive debt by US$9.9 billion from US$25.8 billion at December 31, 2008, and lower Ford's annual cash interest expense by more than US$500 million based on current interest rates.

"By substantially reducing our debt, Ford is taking another step toward creating an exciting, viable enterprise," said Ford President and CEO Alan Mulally. "As with our recent agreements with the UAW, Ford continues to lead the industry in taking the decisive actions necessary to weather the current downturn and deliver long-term profitable growth."

* In total, Ford and Ford Credit will use US$2.4 billion in cash plus 468 million shares of Ford common stock to reduce Ford's outstanding Automotive debt by US$9.9 billion from US$25.8 billion at Dec. 31, 2008. This will reduce Ford's annual cash interest expense by more than US$500 million based on current interest rates

* This successful debt restructuring, together with previously announced agreements with the United Auto Workers, will substantially strengthen Ford's balance sheet

* Approximately US$4.3 billion principal amount of Ford Motor Company's 4.25% Senior Convertible Notes due December 15, 2036 were validly tendered and accepted for purchase pursuant to Ford's conversion offer. Ford will use $344 million to pay a cash premium to convertible note holders who validly tendered.

* Ford Motor Credit Company today separately announced the final results of its previously announced US$1.3 billion cash tender offer for Ford's unsecured, non-convertible debt securities. Based on the tenders received, Ford Credit will use US$1.1 billion in cash to purchase US$3.4 billion principal amount of Ford's unsecured notes.

* As previously announced, Ford Credit used US$1 billion to purchase US$2.2 billion principal amount of Ford's term loan debt at a price of 47 percent of par.

Credits: JRC