DEARBORN, Mich. — Ford Motor Credit Company announced
last Wednesday that its board of directors and the board of directors of Ford
Motor Company 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, or 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, of which $6.9 billion aggregate
principal amount is outstanding, under Ford’s secured credit agreement on Dec. 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.
Another part of this debt restructuring plan involves Ford’s conversion
offer of its 4.25 percent senior convertible notes due Dec. 15, 2036, in which it will pay a premium
in cash to induce the holders to convert debt for shares of Ford’s common
stock.
Ford will also defer future dividend payments on the 6.50 percent Cumulative
Trust Preferred Securities of Ford Motor Company Capital Trust II beginning in
April.
