FoMoCo's Finance arm Sold $1.75 Billion in five year debt bonds

[jpd80]

LINK
Ford Motor Company's finance arm sold $1.75 billion of five-year debt, taking advantage of investor demand for high-yield bonds, on pace for the longest rally since 1996.

Ford Motor Credit Co., the biggest issuer of speculative- grade securities last year and the only one of the three largest U.S. automakers to avoid bankruptcy, sold the notes with a 7 percent coupon. That’s the lowest fixed-rate yield Ford has paid on dollar bonds since June 2005, and compares with the 8.7 percent rate on similar notes sold in September, according to data compiled by Bloomberg.

Another $1.75 Billion in cash raised, Ford keeps motoring on...

[bobthebilda]

http://www.fordvehicles.com/incentives

I spose that raising money from the market, instead of getting it from the government does show some confidence, but borrowing money at 7% so you can sell cars at zero percent finance, may have its draw backs.

[jpd80]

Originally Posted by bobthebilda

http://www.fordvehicles.com/incentives

I spose that raising money from the market, instead of getting it from the government does show some confidence, but borrowing money at 7% so you can sell cars at zero percent finance, may have its draw backs.

Did you read the fine print?

0% finance over 36 months at $27.78 per $1,000 financed regardless of down payment.

I'm no finance wizzard but 0% over 36 months +$1,000 cash back is nothing
compared to what GM and Toyota are offering with regards cash and financing.

USA is in the middle of an incentives war.

Toyota RAV4: No money down, $299/month drive away.....

One thing, the finance raised was for funding changes to the structure of the business,
not for customer finance. The two are separate issues.

[TUF_302]

With the way things are going for Ford at the moment, and with GM loosing money again, surely Ford is the biggest in the US again

[bobthebilda]

Originally Posted by jpd80

Did you read the fine print?

I'm no finance wizzard but 0% over 36 months +$1,000 cash back is nothing
compared to what GM and Toyota are offering with regards cash and financing.

USA is in the middle of an incentives war.

Toyota RAV4: No money down, $299/month drive away.....

One thing, the finance raised was for funding changes to the structure of the business,
not for customer finance. The two are separate issues.

JPD, the money was raised by Ford Credit, Not Ford Motor Company. Altho owned by ford moco, they are seperate. There are no issues that Ford should compete with GM and Toyota in offering incentives, but alot of times, this is a race to the bottom, and the most cashed up normally wins. most cashed up = Toyota, Most who government wont let fail = GM. The winner will be the company with the biggest worldwide geographical spread, and is able to sit out these profit depleting fights.

[vztrt]

Originally Posted by TUF_302

With the way things are going for Ford at the moment, and with GM loosing money again, surely Ford is the biggest in the US again

As long as they are profitable they can be stay where they are now.

[jpd80]

Originally Posted by bobthebilda

JPD, the money was raised by Ford Credit, Not Ford Motor Company. Altho owned by ford moco, they are seperate. There are no issues that Ford should compete with GM and Toyota in offering incentives, but alot of times, this is a race to the bottom, and the most cashed up normally wins. most cashed up = Toyota, Most who government wont let fail = GM. The winner will be the company with the biggest worldwide geographical spread, and is able to sit out these profit depleting fights.

By contrast, Ford is not offering $5,000 on the hood discounts, the 0% finance thing is a bit dodgey
because they make it up on the trade in price in three years time. This little gem was explained to me by a US dealer friend a couple of years ago.

believe me, most of Ford's vehicles do not have much incentive attached to sales, $1,000 cash here and there is just seed money and dealers usually get it back in options anyway...

[phillyc]

From that first link - Bloomberg

Originally Posted by Boomberg

‘Feel Good’

“Ford is the one high-yield auto company investors feel good about in terms of momentum and sales,” said Lon Erickson, a managing director at Santa Fe, New Mexico-based Thornburg Investment Management, who helps oversee $4 billion in taxable debt.

The automaker raised $4.6 billion through Ford Motor Credit last year, becoming the top issuer of junk securities for the period, Bloomberg data show. Ford Motor Credit sold $1.5 billion of three-year 6.625 percent notes in June 2005 at 3.3 percentage points more than similar-maturity Treasuries.

Ford avoided the fate of its U.S. competitors by borrowing $23 billion in late 2006 before credit markets froze. The automaker put up all major assets, including the Ford name, as collateral to build a cash cushion to withstand losses while developing new models.

The company led U.S.-based automakers with a 40 percent jump in March vehicle sales. Ford ended three years of losses in 2009 with net income of $2.7 billion and forecasts a pretax operating profit this year.