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|Subject: Re: Ford motor credit, 2037, yielding 7.3||Date: 11/29/2012 9:53 PM|
|Author: joelcorley||Number: 34537 of 35361|
You wrote, Just happened to notice this one. I did not look into it any further than this
8/2032, 7.5's, selling for 101, the bond title reads Ford Company Credit Cont Offer. I did not bother to look up what that means.
So if a bond issued by the financing/credit arm of an auto maker defaults, does the bond holder get to go out and repo a vehicle?
If I recall correctly, Ford Credit is a finance company just like GMAC (now Ally). Generally finance company bonds are unsecured and default often means a total loss for the bond holder.
In general I like Ford Motor Corp and have profited from their debt. However, I would want a premium for Ford Credit vs. Ford Motor Corp as the recovery in the default of the finance company would be poor to non-existent.
I'll leave the rest the DD up to you. Just remember that while dependent, Ford Credit is essentially a separate entity from Ford Motor.
BTW, I wouldn't touch Ally Bank debt ... though they do have CDs of mine, but those are FDIC insured.
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