Ford Motor Friday raised $8 billion from corporate debt investors to spur its cash reserves as the coronavirus outbreak dented vehicle sales and production, resulting in an estimated loss of about $2 billion for the first quarter.
The Dearborn, Michigan-based firm, which lost its investment-grade standing in March, raised new funds with a three-part debt providing, based on a regulatory filing.
Investors stated Ford benefited from the U.S. Federal Reserve’s step last week to backstop debt offerings by corporations that misplaced funding-grade credit score rankings after the COVID-19 crisis accelerated in the U.S.
In an environment, the place rates of interest on cash savings are near zero, and Ford pays investors interest of between 8.50% and 9.625% on the new debt securities.
There was around $40 billion value of demand from investors throughout the three debt packages, based on an individual conversant in the matter.
Ford had earlier drawn down more than $15 billion from revolving credit traces to ride out the pandemic, which forced the shutdown of its North American and European factories during the last month.
Individually, General Motors revealed in a regulatory filing that it had entered into a 364-day revolving credit agreement of $1.95 billion. The automaker said it had allotted the credit line for unique use by its financial services business.