FoMoCo said today that it is trying to eliminate up to $10.4 billion of its debt by offering debt-holders cash and stock.
“As part of this debt restructuring plan, Ford Credit has commenced a $1.3 billion cash tender offer to purchase Ford”s unsecured, nonconvertible debt securities, of which approximately $8.9 billion aggregate principal amount is outstanding as set forth in detail in the table below,” Ford said in a statement. “Ford Credit also has commenced a separate $500 million cash tender offer to purchase Ford”s senior secured term loan debt.
Ford will offer to convert up to $4.2 billion in bonds issued in 2006. For each $1,000 bond, Ford will offer 108.7 shares of its stock plus $80 in cash.
“The tender offers we are announcing today will play a key role in supporting Ford’s plan to create a healthy, profitable enterprise,” said Ford Credit Chairman and CEO Mike Bannister.
FORD MOTOR CREDIT COMPANY ANNOUNCES LAUNCH OF CASH TENDER OFFERS AS PART OF FORD MOTOR COMPANY”S DEBT RESTRUCTURING PLAN
– Ford Motor Credit Company commences $1.3 billion cash tender offer for Ford Motor Company unsecured, non-convertible debt securities
– Ford Credit commences $500 million cash tender offer for Ford”s senior secured term loan debt
DEARBORN, Mich., Mar. 4, 2009 ““ Ford Motor Credit Company announced today that its Board of Directors and the Board of Directors of Ford Motor Company (NYSE: F) have approved a plan to restructure Ford”s debt through a combination of a conversion offer by Ford and tender offers by Ford Credit.
As part of this debt restructuring plan, Ford Credit has commenced a $1.3 billion cash tender offer to purchase Ford”s unsecured, nonconvertible debt securities (the “Notes”), of which approximately $8.9 billion aggregate principal amount is outstanding as set forth in detail in the table below. Ford Credit also has commenced a separate $500 million cash tender offer to purchase Ford”s senior secured term loan debt (the “Term Loan Debt”), of which $6.9 billion aggregate principal amount is outstanding, under Ford”s secured Credit Agreement (the “Credit Agreement”) dated December 15, 2006. No debt securities of Ford Credit are included in these tender offers.
“The tender offers we are announcing today will play a key role in supporting Ford’s plan to create a healthy, profitable enterprise,” said Ford Credit Chairman and CEO Mike Bannister. “It is in Ford Credit”s best interest to advance Ford”s long-term financial stability as it will strengthen our ability to profitably support the sale of Ford products.”
Any Notes acquired by Ford Credit will be retired in settlement of existing intercompany tax liabilities to Ford or in distributions to Ford. Any Term Loan Debt acquired by Ford Credit is expected to be distributed to its parent, Ford Holdings LLC, and forgiven. These payments and distributions by Ford Credit are consistent with its previously announced plans to return capital to Ford.
Notes Cash Tender Offer
Ford Credit is offering to purchase the Notes (the “Notes Tender Offer”) on terms and conditions that are set forth in an offer to purchase dated March 4, 2009 (the “Notes Offer to Purchase”) and the related letter of transmittal (the “Notes Letter of Transmittal”), both of which are being sent to holders of the Notes.
Ford Credit is offering to purchase the Notes set forth in the table below for an aggregate purchase price of up to $1.3 billion (the “Maximum Notes Tender Amount”). If the aggregate purchase price for Notes that are validly tendered exceeds the Maximum Notes Tender Amount, Ford Credit will accept for payment only the aggregate principal amount of Notes that does not result in an aggregate purchase price above the Maximum Notes Tender Amount, and the Notes will be purchased in accordance with the Acceptance Priority Level (in numerical priority order) as set forth in the table below (the “Acceptance Priority Level”).
All Notes tendered having a higher Acceptance Priority Level will be accepted before any tendered Notes having a lower Acceptance Priority Level are accepted. If there are sufficient remaining funds to purchase some, but not all, of the Notes of an applicable Acceptance Priority Level, the amount of Notes purchased in that priority level will be prorated based on the aggregate principal amount tendered with respect to the applicable Acceptance Priority Level. In that event, Notes of any other series with a lower Acceptance Priority Level than the prorated series of Notes will not be accepted for purchase.
The “Notes Tender Offer Consideration” for each $25.00 face amount of the 7.50% Notes due June 10, 2043, each $1,000 face amount of the 7.45% GLOBLS due July 16, 2031, 6 5/8% Debentures due October 1, 2028, 6 3/8% Debentures due February 1, 2029, 8.900% Debentures due January 15, 2032, and 9.980% Debentures due February 15, 2047 and each $5,000 face amount of each other series of the Notes set forth in the table below tendered and accepted for purchase pursuant to the Notes Tender Offer will be the applicable tender offer consideration for each series of Notes set forth in the table below. The “Notes Total Consideration” includes the Notes Tender Offer Consideration plus the early tender premium for each series of Notes set forth in the table below (the “Notes Early Tender Premium” and, together with the Notes Tender Offer Consideration, the “Notes Total Consideration”).
Holders of Notes must tender their Notes before 5:00 p.m., New York City time, on Thursday, March 19, 2009, unless extended (such date and time, as the same may be extended, the “Notes Early Tender Time”) to be eligible to receive the Notes Total Consideration. Holders who tender their Notes after the Notes Early Tender Time will be eligible to receive only the Notes Tender Offer Consideration.
The Notes Tender Offer will expire at 9:00 a.m., New York City time, on Friday, April 3, 2009, unless extended or earlier terminated (such date and time, as the same may be extended, the “Expiration Time”). Notes tendered pursuant to the offer may not be withdrawn, unless otherwise required by law.
The complete terms and conditions of the Notes Tender Offer are set forth in the Notes Offer to Purchase and the Notes Letter of Transmittal that are being sent to holders of the Notes. Holders are urged to read the Notes Tender Offer documents carefully when they become available. Copies of the Notes Offer to Purchase and Notes Letter of Transmittal may be obtained from the Information Agent for the Notes Tender Offer, Global Bondholder Services Corporation, by calling (866) 470-4300.
Consummation of the Notes Tender Offer is subject to, and conditioned upon the satisfaction or, where applicable, waiver of certain conditions set forth in the Notes Offer to Purchase. Ford Credit may amend, extend, or terminate the Notes Tender Offer at any time.
Cash Tender Offer for Senior Secured Term Loan Debt
Ford Credit also has commenced a $500 million cash tender offer (the “Term Loan Offer”) to purchase Ford”s Term Loan Debt. The Term Loan Offer will be conducted on a “Dutch auction” basis whereby term loan lenders will be invited to submit bids to sell their Term Loan Debt within a price range of not less than 38% of par, nor greater than 47% of par. Term loan lenders will receive the lowest price within the range (the “Clearing Price”) at which Ford Credit can complete the Term Loan Offer for $500 million. If the aggregate purchase price for Term Loan Debt tendered exceeds $500 million, Ford Credit will (i) purchase at the Clearing Price all Term Loan Debt tendered at a price below the Clearing Price and (ii) purchase Term Loan Debt tendered at the Clearing Price on a pro-rated basis.
Consummation of the Term Loan Offer is subject to, and conditioned upon the satisfaction or, where applicable, waiver of certain conditions set forth in the offer to purchase.
If the amount of Notes and Term Loan Debt tendered results in a payment by Ford Credit of less than $1.8 billion aggregate consideration, Ford Credit may apply such remaining cash to the repurchase of other debt of Ford through tender offers, exchange offers, privately negotiated transactions, open market purchases or otherwise, or may distribute such cash to Ford for such purpose, subject to any applicable restrictions.