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Ford announces $2 billion convertible notes offering


Jim Farley in 2017.

Luke Macgregor | Bloomberg | Getty Images

DETROIT – Ford Motor plans to boost about $2 billion by an offering of five-year convertible notes, the corporate introduced Tuesday.

The automaker intends to make use of the web proceeds from the sale for normal company functions, together with the potential compensation of debt. Ford had $24 billion in debt on the finish of final yr excluding its monetary arm.

The notes will probably be offered by a non-public offering to certified institutional consumers, due in 2026. Ford says the preliminary mixture principal quantity will probably be paid again in money, whereas any extra quantity may even be paid in money, shares of the inventory or a mix of each.

Convertible bonds are debt that may be transformed right into a specified variety of shares, whereas offering the advantages of a bond, corresponding to curiosity funds however historically at low charges.

Ford expects to grant the preliminary purchasers of the notes a 13-day possibility to purchase as much as a further $300 million mixture principal quantity of the notes, solely to cowl overallotments, if any.

Shares of Ford are up 50% to this point this yr to $13.20 on plans to accelerate its car electrification efforts beneath CEO Jim Farley, who took over the helm in October. The firm’s market cap at the moment stands at $51.6 billion.



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