• May 25, 2006

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]



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    • 1 Second Ago
  • 5 Comments
      • 8 Years Ago
      See, see what Aston gets for having to deal with non-stick driving Daniel Craig!!

      • 8 Years Ago
      Mr. Ford himself has the requisite funds for the $2.5 Billion bail out. If he did it himself, that might indicate to investors his strong commitment to the company - or - it might send a signal that no body else would be willing to lend Ford the money.

      http://www.automobilesdeluxe.blogspot.com
      • 8 Years Ago
      As long as they are able to either refund or return the principal on my Ford bonds maturing in 2009 I will be very happy.
      • 8 Years Ago
      Junk rating for a company that produces a junk product.
      • 8 Years Ago
      I have much too much of their 7.45% 07/16/31 bonds and
      have watch the principal decline more than 25%. Should
      I cash them in and run away, hoping to find a great
      investment to recoup these principal losses? I would think the 10.75% new bonds would "kill" mine even more.
      Opinions welcome, thanks.