Ford gets expanded and extended revolving credit

Article by Christian A., on March 16, 2012

Ford Motor Co. wants to improve its balance sheet and to eventually reach an investment-grade credit rating and so it has recently revealed an expanded and extended revolving credit facility. From an $8.9 billion revolving credit, Ford now has access to $9.3 billion. Of this figure, $9 billion now matures on Nov. 30, 2015, two years later.

As planned, the other $300 million will mature in 2013. Ford Treasurer Neil Schloss said that this credit stands for a valuable source of committed liquidity and financial flexibility for the automaker. Schloss said that this offer was "significantly oversubscribed" by banks. He added that this is an insurance policy that the company hopes to never have to use.

This revolver is included in the over $23 billion that Ford borrowed in late 2006 to support its turnaround, secured by assets such as the Blue Oval logo. The initial line of credit was at $11.5 billion. Since then, Ford has repaid almost all of the $23 billion. The collateral promised to lenders under the revolver would be released when Ford achieved investment grade ratings from at least two of the three major ratings agencies.

Ford is rated by Moody's Investors Service, Standard and Poor's Ratings Service and Fitch Ratings at one notch below investment grade. Banks that participate in this deal understand that this revolving credit would shift to an unsecured facility "in the near future" as soon as Ford reached investment grade. A "One Ford" plan is being enforced to simplify and unify product development and supplies. Last year, Ford's U.S. market share was 16.8%, falling behind General Motors Co. with 19.1%.

Topics: ford

If you liked the article, share on:

Comments

Recommended

Not so long ago, the 2018 Genesis G80 Sport made its debut at the 2016 LA Auto Show. But at that time, it did not have a price yet. And...
by - April 23, 2017
It seems like an increase in price has become a trend for automotive companies lately. Genesis isn’t alone when it comes to this. Subaru had just announced that the 2018...
by - April 23, 2017
Imagine a sports car morphing into an SUV. Chevrolet initially revealed the FNR Concept at the previous Shanghai Auto Show in 2015. For this year, Chevy once again graces the...
by - April 22, 2017
From the moment FCA kicked off with its 3-month-long ad campaign until the day it unveiled the new Dodge Challenger SRT Demon, folks have been guessing what the exact figures...
by - April 22, 2017
Some people may think Audi Sport is a new company but it is in fact the motorsport division of Audi combined with the best of what Quattro GmbH can offer....
by - April 21, 2017
Facebook

Youtube Channel

Tip Us
Do you have a tip for us?
Did you film an important event?
Contact us
Newsletter
Subscribe to our newsletter!
Subscribe
Galleries