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
Credit rating agency Moody's is said to be considering another downgrade of General Motors' debt rating, which is already languishing six levels below junk-bond level. The potential move is said to be a reaction to GM's latest move to replace a $5.6B line of credit, which may require GM to pledge some of its assets to secure. Such a move would result in fewer assets available to unsecured creditors in the event of a bankruptcy.
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