Ford Develops Plan to Cut Debt

Ford Develops Plan to Cut Debt

Ford Develops Plan to Cut Debt
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Ford Develops Plan to Cut Debt
The Ford Motor Company is marketing $1.25 billion of bonds following the credit boost received from Moody’s Investors Service. Ford plans to sell senior unsecured three-year notes that yield up to 3.875 percent. This compares with the 3.2 percent yield on the average investment-grade debt due in three to five years.
Moody’s raised Ford’s credit rating to Ba1 yesterday—the highest non-investment grade level. Ford is working to regain the investment-grade status it lost in late 2005. The upgrade and the positive forecast reflect the company’s striders and the expected future growth.
In addition to Moody’s upgrade, Ford also received an improved credit rating from the S&P, who awarded the auto giant with a BB+ score—the highest non-investment grade. Ford has reiterated its goal of cutting its debt to under $10 billion by 2015—the company had automotive debt of nearly $13 billion on Septmber 30th of this year.

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