From all appearances, Ford Motor Company feels it will need a well-baited hook in order to attract investors to its most recent issue of bonds. As such, the Blue Oval crew is offering $2.5 billion with rates as high as 10.75 percent - a record for the company. Analysts state that this is "an expensive way" for the company to hold onto its $21.2B in cash, even as its prepares for yet another round of downsizing. Ford itself confesses that selling credit is currently "a little painful," and that the offering will add $90M each year to Ford's interest costs.
Ford bondholders are already due $57B over the next five years, and the company is saddled with a total of $121 in debt that carries a "junk" rating.
[Source: Detroit Free Press]