Ford to extend revolving credit; raise $3 billion equity

Posted on Tuesday, November 3rd, 2009 at 4:26 PM EST.

Ford Motor Co. said on Monday it would pay back in part and extend by two years $10.7 billion of secured debt and issue some $3 billion of stock and equity linked securities to improve its balance sheet, Reuters reported.

Ford, which posted a surprise third-quarter profit of nearly $1 billion earlier on Monday, said it would pay down as much as $2.5 billion of its secured debt due in December 2011 and extend the remainder by two years to November 2013, the news service reported. The moves come as Ford faces pressure to restructure and reduce its long term debt. The automaker borrowed more than $23 billion in late 2006 to finance its restructuring and is the only large U.S. automaker to avoid bankruptcy in 2009, Reuters said.

Ford said it had commitments from lenders to extend $6 billion of the remaining $8 billion of debt from the secured revolver, the news service said. The automaker said it would offer $2 billion of senior convertible notes due in 2016 that are convertible at Ford’s option into common stock, cash or a combination of the two, the story said. (Reuters)

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