Yeah I'm fully aware of this boards (F-150) focus but I thought this latest salvo by Ford's exec's is very interesting and DOES in fact affect the F-150. Why? Because it's a Ford.



Ford's debt buyback oversubscribed

Embattled automaker has raised additional cash to retire up to $11.3 billion in debt.

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<!--endclickprintexclude--><!-- /REAP -->DETROIT (Reuters) -- Ford Motor Co. said Monday it had raised the amount of secured debt it is buying back under a broad plan to slash its automotive debt by more than 40% and reduce annual interest costs.

The automaker could retire up to $11.3 billion of automotive debt under buybacks launched earlier in March, or nearly 44% of that $25.8 billion of outstanding debt.

Ford said an offer through its finance arm to buy back senior secured term loan debt was oversubscribed and it had doubled the cash available for the offer to $1 billion to buy back $2.2 billion of debt at 47 cents on the dollar. Ford had originally planned to buy back about $1.3 billion of the debt.

The debt restructuring plan also includes a cash tender offer for Ford's unsecured, nonconvertible debt securities and a conversion offer for its 4.25% senior convertible notes due Dec. 15, 2036. Both remain open to April 3.
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"It's kind of strange in that bondholders are voting to take 47 cents on the dollar, almost a no-confidence vote for Ford's longer term prospects, and that is actually a good thing for Ford and they are able to recapitalize more cheaply," said Pete Hastings, fixed income analyst at Morgan Keegan.

Ford, which aims to complete a turnaround plan without seeking emergency government loans, borrowed $23 billion in late 2006 secured with most of its remaining assets including the familiar blue oval logo.

The buyback program will free up some of Ford's assets at a time when GM and Chrysler both are required to reduce their debt structures as part of the government bailout.

 

One of the reasons people are selling back at 47 cents per dollar is an overriding need to raise funds. If the bonds were held to maturity, they would return 100 cents on the dollar. However, if hedge funds and other bond holders needed to raise money and sold the bonds on the open market, the price would drop lower with each sale and they might not even receive 47 cents on the dollar. So, it's a win for Ford, and a win for the hedge funds and bond mutual funds which either need some cash *right now* or want to get auto stocks out of their portfolio.

 

As long as these securities do not have callable provisions then yes they will be settled at par upon maturity. But how many of them are s-term in nature? I'd bet most if not all are way out on the maturity ledge which means much more risk. And a definite sign bondholders have little faith in Ford's financial position. GM's bondholders are balking at GM's attempt to get them to swap debt for equity,. In other words they too feel very uneasy in GM's financial well being. Remember Ford put up as collateral most if not all their hard assets in order to avoid the route GM took.

 

CBS News did a little story on Ford, on Mon. night. They stated that they are the only domestic manufacturer that was not still cutting hours for assembly workers. They said the F150 Line is running 24/7. And all of them are spoken for. Either by a dealer, or delivery to a customer.

Should make the F150 the best selling vehicle, again?

That's gotta help Ford out.

 

well i can tell one thing that ford's furture is looking a lot brighter than others, but one thing i have been wonder that might be a little off track is about buying stock in ford, reason i ask i've heard stock price are low and looks like it won't be long before ford makes a full come back in the next year or so

 

They said the F150 Line is running 24/7. And all of them are spoken for. Either by a dealer, or delivery to a customer.

Anyone believe that? I know they cut out production plants so maybe this is true. If so it doesn't hurt for sure but sounds better than it truly is. The Big 3 are in trouble. There's no doubting that. And I think it's a good bet GM/Chrysler willl merge. Which will either hurt/help Ford.

 

I wouldn't be to afraid of buying Ford stock. With all of the newer fuel efficient engines coming in 2010, they should boom.

I know one thing. That if they build a full sized truck that'll get 25 MPG. They'll have peeps lined up around the block to buy them.

 

I bought at $3.15 when the other makers said they wanted bail out money and Ford didn't. Went down to $1.95 I think but is now over $2.50, so I think I will do good on my investment in the long run. Just about everybody around my neck of the woods are buying Fords. We don't have any Chevy or Dodge dealers in the county anymore that I know of. Chris

 

yeah i know fords are selling good in my area where the gm and dodge dealer aren't moving any trucks

i was on ford web site seeing about the stock and they want a 1000 bucks to get in and buy shares, sounded a little off to me ?

 

Dearborn Assembly is already scheduled for 15 weeks of downtime through 2009 with more weeks still being added. Kansas City may be off the entire summer. Last I checked sales were way down compared to 2008. Not sure where CBS got their information.

 

Wow it looks like there's going to be a massive delay in the 2010's like there was for the 2009's or even worse. Might not see the 2010's until 2010.