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Ford Issues $8 Billion Debt Securities After Coronavirus Eats $2 Billion

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.

Ford Issues $8 Billion Debt Securities After Coronavirus Eats $2 Billion

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.

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