At the start of December, Ford Motor Co grabbed a liquidity lifeline with its first ever secured loan facility. All manufacturing and auto assets, plus some or all of its subsidiaries, are included. The move structurally subordinates unsecured debt holders, particularly in FMC, prompting one-notch downgrades to triple Caa1 for FMC from Moody’s, and to B from Fitch and a two-notch move from S&P to CCC+. Ford Motor Credit remains in Single B territory.
Alongside a $4.5 billion convertible there was an $18.5 billion B loan and a $11.5 billion revolver. The deal was arranged by JPMorgan, Citigroup and Goldman Sachs. Having secured enough cash to last for a couple of years, the company followed up with a $3 billion high-yield bond offering via Deutsche Bank, Goldman Sachs, Lehman Brothers, Merrill Lynch and Morgan Stanley.