8-KOther EventsExhibits & Filings

FORD MOTOR CO 8-K Report, Corporate Update (Mar 4, 2009)

Filed March 4, 2009For Securities:FF-PCF-PDF-PB

Summary

Ford Motor Company (F) announced on March 4, 2009, a dual strategy aimed at managing its debt obligations and potentially reducing its outstanding convertible debt. The company launched a "Conversion Offer" to incentivize holders of its 4.25% Senior Convertible Notes due 2036 to convert these notes into common stock. This offer is designed to reduce the principal amount of convertible debt on Ford's balance sheet by encouraging conversion, potentially at a premium. Concurrently, its subsidiary, Ford Motor Credit Company LLC, initiated two significant debt tender offers. The first offer is to purchase up to $1.3 billion of unsecured, non-convertible debt securities of Ford. The second, separate offer targets Ford's senior secured term loan debt with a $500 million cash tender offer. These actions reflect a proactive approach to debt management during a challenging economic period, aiming to deleverage and potentially improve financial flexibility.

Key Highlights

  • 1Ford is offering a premium to holders of its 4.25% Senior Convertible Notes due 2036 to convert them into common stock.
  • 2The Conversion Offer provides an opportunity for Ford to reduce its outstanding convertible debt balance.
  • 3Ford Motor Credit Company is launching a tender offer to purchase up to $1.3 billion of Ford's unsecured, non-convertible debt.
  • 4Ford Motor Credit is also conducting a separate $500 million cash tender offer for Ford's senior secured term loan debt.
  • 5These debt management initiatives are part of Ford's broader strategy to address its financial obligations.
  • 6The offers are set to expire on April 3, 2009, unless extended or terminated.

Frequently Asked Questions

The "Conversion Offer" is designed to encourage holders of Ford's 4.25% Senior Convertible Notes due December 15, 2036, to convert their notes into common stock. Ford is offering a premium in cash to incentivize this conversion, thereby aiming to reduce its outstanding convertible debt.

Ford Motor Credit Company is making two separate tender offers: one to purchase up to $1.3 billion of Ford's outstanding unsecured, non-convertible debt securities, and another to purchase up to $500 million of Ford's senior secured term loan debt.

The Conversion Offer and the tender offers by Ford Motor Credit Company are set to expire on April 3, 2009, at 9:00 a.m. New York City time, unless Ford or Ford Motor Credit extends or terminates them earlier.

Tendered Convertible Notes can be withdrawn at any time prior to the Expiration Date. However, tendered unsecured, non-convertible debt securities generally cannot be withdrawn, except in certain limited circumstances where withdrawal rights may be required by law.