In March 2020, Ford Motor Company stopped making cars. Before the end of the month, the company was downgraded to junk by Moody’s and Standard & Poor’s. It forecast a net loss of $2 billion for the first quarter.
A tough time, one would think, to ask investors to stump up billions just to help it get through.
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But it didn’t work out like that. The bankers that Ford had hired to sell a bond issue in mid April were finding something surprising. Not only were investors willing to buy, but they wanted more and more bonds. In the end, orders came in for $40 billion.
“They kept saying: ‘Give us a bigger deal,’” says one syndicate head in New York.
Ford sold $8 billion of bonds, having also drawn down more than $15 billion from its bank lines. As of April 24, according to its first-quarter results announcement, the company had cash of $35 billion.
