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| Economy |
| Ford completes tender offer, cuts billions in debt |
| 2009-04-08 |
| [Mail and Globe] Shares of Ford soared 16% on Monday after the company said it completed tender offers that will reduce its debt by 38% and shave millions of dollars off its interest costs. The caraker retired about $9,9-billion in securities in exchange for cash and shares under terms of the debt buybacks. Combined, the moves are expected to reduce the Ford's interest expenses by more than $500-million this year, as it tries to weather the worst auto sales downturn in 27 years. The Dearborn, Michigan-based company said it will pay a total of $2,4-billion and issue 468-million shares as a result of the offers. Shares of Ford rose 52 cents to close at $3,77 on Monday. About $4,3-billion in Ford's senior convertible notes were tendered under an offer that expired on Friday. Up to $344-million will be used to pay cash premiums to note holders. A separate offer to repurchase notes from its financing arm resulted in $3,4-billion in securities being tendered. Ford Motor Credit will use $1,1-billion to purchase that secured term loan debt. Ford Motor Credit previously said a second cash tender offer that expired on March 23 was "over-subscribed," and it doubled the amount of cash it would spend to buy back the debt. That resulted in the use of $1-billion to purchase $2,2-billion in term loan debt. Its total debt was reduced to about $15,9-billion after the buybacks. |
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