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Author: BFatConservative One star, 50 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 18256  
Subject: Ford Refi Date: 1/3/2013 3:18 PM
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Took a little longer than I expected, but 2 billion at 5% is a nice way to start the new year:

Let's say they are getting rid of bonds paying 7.5% for the 5%. 2.5% savings on $2 billion. $50 million before refi costs.

Last year they had 12 billion in debt. Probably more to come? Time will tell.



"Ford is taking advantage of what it considers to be very favorable market conditions to issue low-cost, long-term debt to improve its balance sheet," the company says in the bond prospectus.

Proceeds are for buying back costlier debts and to make voluntary payments to its pension plan.

Fitch Ratings said Thursday that Ford is "essentially offsetting any debt increase with a reduction in its substantial pension liabilities," so the new debt "has no effect on the company's current ratings or outlook."

The bonds are expected to pay investors 1.90 percentage point over comparable Treasurys, or roughly 4.97%. When Ford sold similar debt 12 years ago, it paid a fixed-rate of 7.45%.
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