Word: fording
(lookup in dictionary)
(lookup stats)
Dates: during 2000-2009
Sort By: most recent first
(reverse)
There was always a sweet bit of fiction in the notion that Ford (F) was so much better financially than GM (GM) or Chrysler that it could weather the global economic downturn no matter how brutal it turned. All of that magical thinking came to an end as the No.2 American car company said it would have to "restructure" its balance sheet, which has always been short-hand for finding a way to remain in business...
Once domestic vehicle sales began to decrease 30% per month, as they did beginning last fall, and then the rate increased to 40% or more the last three months, there was no way that Ford could finance its losses over the next year. The news that Toyota (TM) and Honda (HMC) might seek assistance from the Japanese government meant that not a single car company in the world would get by on its own. (Read about the CEOs behind Detroit's Big Three...
...Ford proposed a complex plan to retire nearly 40% of its long-term obligations. The company wants to restructure its debt through a combination of a conversion offer by Ford and cash tender offers by Ford Credit. The car company will attempt to get holders of $4.88 billion in convertible notes due in 2036 to move their holdings into the common stock of the company. The debt carries an interest rate of 4.25%. At the same time, Ford Credit will begin a $1.3 billion cash tender offer to purchase certain series of Ford's outstanding unsecured, nonconvertible debt...
...transformation of Ford's debt load looks more complicated than launching the Space Shuttle, and it is. But, if the plans work, the car company will have dispensed with well over a third of its debt...
...works, that is. Ford would like the markets to view this as a series of decisions made from a position of strength. The fact that it is not asking for money from the government would appear to make that true. In reality, holders of Ford's paper would probably rather bargain with the company now than with the government a year from now when every U.S. auto firm will need money again...