THERE WAS A time last year when Ford Motor found itself in
what could have been a serious liquidity squeeze. After the
downgrade of its long-term debt rating to Baa1/BBB+, it had to more
than halve its outstanding in the commercial paper market by the
end of 2001 and is looking to cut this by around half again in
2002.
It has pursued a range of alternatives to make up the shortfall.
The $5 billion convertible issued in January improved its cash
position and Ford Motor Credit has also been more active in the
term debt markets, but at a cost. Recently its 6.875% bonds due in
February 2006 were trading at Libor plus 221 basis points.
In contrast, Ford Motor Credit's bonds backed by a diverse pool of
consumer and dealer loan receivables have been a much better bet.
It kicked off this year with a $5.1 billion...
