Ford to reduce debt by another $3 billion
Taking a leap towards attaining an investment grade credit reading, Ford announced plans today to reduce its corporate debt levels by another $3 billion through the planned redemption, or conversion of preferred securities. After all is said and done, Ford is looking at about $16 billion in debt; the company ended 2009 with $33.6 billion in debt.
Ford is also looking at saving $190 million per year in interest costs from the move.
“We remain focused on reducing our Automotive debt as the core automotive business continues to strengthen,” said Lewis Booth, Ford executive vice president and chief financial officer. “We are pleased with the progress we have made, and we are committed to continuing to improve our balance sheet to lay a solid foundation for a strong and profitably growing business in years to come.”
Moody’s Investors Service has recently enhanced its outlook on Ford from stable to positive, which puts the company one two steps away from investment grade, while Standard & Poor’s puts it three steps below.
Ford lost its investment-grade ratings in 2005, and hopes to regain them this year via enhancing its balance sheet.
– By: Stephen Calogera