UnThreaded | Threaded | Whole Thread (3) | Ignore Thread Prev Thread | Prev | Next | Next Thread
Author: joelcorley Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 35345  
Subject: Re: Ford motor credit, 2037, yielding 7.3 Date: 11/29/2012 9:53 PM
Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Recommendations: 2
blacktreechaser,

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.

- Joel
Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Print the post  
UnThreaded | Threaded | Whole Thread (3) | Ignore Thread Prev Thread | Prev | Next | Next Thread

Announcements

Post of the Day:
Value Hounds

Medallion Financial: TAXI!
What was Your Dumbest Investment?
Share it with us -- and learn from others' stories of flubs.
When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Community Home
Speak Your Mind, Start Your Blog, Rate Your Stocks

Community Team Fools - who are those TMF's?
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and "#1 Media Company to Work For" (BusinessInsider 2011)! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.
Advertisement