Ford Seeks $12 Billion Credit Line Expansion

Cameron Aubernon
by Cameron Aubernon

In anticipation of heavy spending this year and beyond, Ford is seeking a line of credit expansion totaling $12 billion.

Bloomberg reports the line of credit will consist of a $9 billion revolving loan for a term of five years — which can be borrowed again once repaid — augmented by a $3 billion financing pact set to expire within three years of issuance. The Blue Oval may pay 1.5 percentage points for the line expansion, which is more than the three-month LIBOR rate on both items meant to replace a $10.7 billion credit line expiring in 2017.

Funding for the line is being led by JPMorgan Chase, helping to drive the heavy spending Ford anticipates this year as more new models — such as the new Mustang and F-150 — roll off the assembly line.

Cameron Aubernon
Cameron Aubernon

Seattle-based writer, blogger, and photographer for many a publication. Born in Louisville. Raised in Kansas. Where I lay my head is home.

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  • Olddavid Olddavid on Feb 27, 2014

    I'd give it to them in a heartbeat under those terms - but I'm $11 billion or so short. The Blue Oval guys are just about the sharpest domestic producers, with the stones to bet the farm they're right. They did it before, and you don't see anyone bailing on them now. This would be oversubscribed were it an IPO. Besides, JPM can always manipulate LIBOR should the terms go south on them.

  • Lorenzo Lorenzo on Feb 27, 2014

    The last time Ford went deep into a line of credit was when they mortgaged the blue oval itself, just before the economy went off the cliff, the stock market took a dive and there was no credit available for GM and Chrysler to bail themselves out. Do the finance wizards at Ford know/anticipate something?

    • U mad scientist U mad scientist on Feb 27, 2014

      > The last time Ford went deep into a line of credit was when they mortgaged the blue oval itself, just before the economy went off the cliff, the stock market took a dive and there was no credit available for GM and Chrysler to bail themselves out. Do the finance wizards at Ford know/anticipate something? Waiting for that broken clock to swing back around?

  • Deanst Deanst on Feb 27, 2014

    This just increases the amount, extends the term, and lowers the price of the existing facility. The facility was basically undrawn at year-end - its just there in case everything goes to hell and ford needs some liquidity. By the way, its probably not a good idea to just copy the content of an existing news article - especially when it was so poorly written to begin with.

  • HerrKaLeun HerrKaLeun on Feb 27, 2014

    "In anticipation of heavy spending this year and beyond" so all those turbomotors and mysync will get recalled and replaced and they actually honor the warranty?

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