Ford buys back debt...

[FoMoJo]

...at 47 cents on the dollar. 

I guess it's a good deal on Ford's part if they can relieve their debt at half price.

Interest high in Ford debt buy

Ford Motor Co. says the response to its initial offer to buy back secured debt has been so strong that its credit arm is putting up more money to buy back more bonds.

The Dearborn automaker said Monday that the $500 million cash tender offer Ford Credit made earlier this month to buy back the parent company's secured loan debt at 47 cents on the dollar was already oversubscribed. It said Ford Credit would make another $500 million available to allow the company to buy back a total of $2.2 billion through the deal.

In addition, Ford said about $3.4 billion in unsecured nonconvertible debt already had been tendered in response to a related $1.3 billion cash offer, though holders of those notes are still able to sell them to the company at a slightly reduced rate. The company still hopes to get more takers for this offer.

The better-than-expected response to Ford's offer is good news for the automaker, but also reflects the pessimism of investors who are willing to sell their notes well below their face value.

"We are very pleased with the results to date of our debt restructuring initiatives," said Ford Treasurer Neil Schloss in a statement. "With these tenders, we have taken significant steps toward reducing Ford's long-term debt and strengthening our balance sheet."

[FlatBlackCaddy]

Reuters,

January 21st, 2010

Ford, the only american automaker to survive the car market implosion, has just ...........

[Vinsanity]

This is good news.

Am I correct to assume that maybe they can buy back the additional bonds at less than 0.47/dollar?

[r0tor]

you'd really think their stock price would go up on news like that... lol

[FoMoJo]

The better-than-expected response to Ford's offer is good news for the automaker, but also reflects the pessimism of investors who are willing to sell their notes well below their face value.


That is what bothers me.  Are the investors willing to take such a loss because they think Ford will fail or are they just desperate for cash themselves?

[NomisR]

The better-than-expected response to Ford's offer is good news for the automaker, but also reflects the pessimism of investors who are willing to sell their notes well below their face value.


In current economy, it's a little of both.  Fear is driving a lot of this. 

That is what bothers me.  Are the investors willing to take such a loss because they think Ford will fail or are they just desperate for cash themselves?

[SVT666]

The better-than-expected response to Ford's offer is good news for the automaker, but also reflects the pessimism of investors who are willing to sell their notes well below their face value.


That is what bothers me.  Are the investors willing to take such a loss because they think Ford will fail or are they just desperate for cash themselves?

I think they're desperate for cash themselves, and maybe they're concerned that they may not get anything if they don't do it.  It might be a little of both.