DEARBORN, Mich. — Ford Motor Company announced Monday the completion of debt restructuring initiatives that will reduce its debt by $9.9 billion from $25.8 billion. The move was viewed as a positive step, although ratings agencies believe Ford’s fundamental business risks remain unchanged.

Ford and Ford Motor Credit Company will use $2.4 billion in cash and 468 million shares of Ford stock to repurchase the outstanding bond and debt obligations. These moves will reduce Ford’s interest expenses by more than $500 million based on current interest rates.

“By substantially reducing our debt, Ford is taking another step toward creating an exciting, viable enterprise,” said Ford President and CEO Alan Mulally. “As with our recent agreements with the UAW, Ford continues to lead the industry in taking the decisive actions necessary to weather the current downturn and deliver long-term profitable growth.”

About $4.3 billion of Ford’s senior convertible notes were tendered under an offer that expired Friday. Ford will use $344 million to pay cash premiums to convertible note holders.

Ford Credit separately announced that it will use $1.1 billion in cash to purchase $3.4 billion principal amount of Ford’s unsecured notes

Ford Credit previously said a second cash tender offer that expired on March 19 was “over-subscribed,” and it doubled the offer to purchase Ford’s senior secured term loan debt. Ford Credit used $1 billion to purchase $2.2 billion in term loan debt.

The offers for Ford debt were conducted by Ford Credit, with the exception of a conversion of convertible notes, which was conducted by Ford.

Standard & Poor’s Ratings Service, which lowered its corporate credit ratings on Ford Motor Co. to “SD” and certain issue rating to “D,” is expected to assign a new corporate credit rating on Ford by mid-April. And although Ford’s debt repurchase was seen as a positive step, officials with ratings agency don’t believe the new rating will be higher than “CCC.”

“The tender offers will reduce debt and lower interest costs, and Ford has stated that annual interest savings will be more than $500 million,” said Robert Schulz, Standard and Poor’s credit analyst. “However, even with this debt reduction, our preliminary expectation is that the new corporate credit rating will likely not be higher than the ‘CCC’ category initially, because we believe Ford’s fundamental business risks remain unchanged for at least the rest of 2009 and perhaps longer; most notably, deteriorating vehicle demand globally and the substantial execution risk of the ongoing restructuring.”

The sentiment at Fitch Ratings was similar, as it said Ford will remain under severe operating stress through at least 2009 due to continued growth in unemployment, weak consumer confidence and the impact of the credit crisis on consumers and the capital markets.

However, Fitch did say the debt repurchase represents an actual debt reduction, as opposed to General Motors efforts to reduce unsecured debt. Fitch also said the repurchase will allow Ford to realize the benefits under a new United Auto Workers cost-saving agreement, including the option to fund up to 50 percent of the company’s VEBA obligation with equity.

“The shrinking of Ford Credit’s balance sheet and efforts on behalf of the federal government to improve the availability of retail financing through the Term Asset-Backed Securities Loan Facility (TALF) program have benefited Ford’s ability to utilize available capital and liquidity at Ford Credit to effect the debt repurchase program,” said Fitch, which also noted that Ford’s move did little to impact lease and floorplan financing. “Liquidity, however, remains a clear concern over the next 18 months.”