REUTERS: Ford Motor Co on Friday raised US$8 billion from corporate debt investors to shore up its cash reserves as the coronavirus outbreak pummeled vehicle sales and production, resulting in an estimated loss of about US$2 billion for the first quarter.
In an environment where interest rates on cash savings are close to zero, Ford will pay investors interest of between 8.50per cent and 9.625per cent on the new debt securities, IFR reported. Ford on Friday said it had to put up certain assets as security for the loans because it does not maintain an investment-grade status. It has suspended its dividend for the quarter.Stanching the cash drain and restarting profitable operations in Europe and North America will be critical for Ford in the months ahead. The company told investors ahead of Friday's bond deal that absent new funding and a restart of production, it had cash to last to the end of the third quarter.
Still, the company has taken a body blow from the pandemic at a time when it was already wrestling with a difficult restructuring effort begun more than two years ago. Ford's vehicle sales to dealers fell 21per cent in the first quarter, compared with a year earlier.
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