Ford Motor to redeem $2.98 billion 6.5% convertible trust securities

By Toni Weeks

San Diego, Feb. 10 - Ford Motor Co. announced that its subsidiary, Ford Motor Co. Capital Trust II, will fully redeem its 6.5% cumulative convertible trust preferred securities, according to a filing with the Securities and Exchange Commission. The redemption is as a result of Ford's $2.98 billion redemption of its 6.5% junior subordinated convertible debentures.

The securities will be redeemed on March 15 at a redemption price of $50.33 per trust preferred security plus an accrued distribution of $0.5416667 per security.

Prior to the redemption date and until 5 p.m. ET on March 14, holders may convert their trust preferred securities into 2.8769 shares of Ford common stock per trust preferred, equivalent to a conversion price of $17.38 per share of Ford common stock (NYSE: F; $15.95 at close Feb. 10).

Redemption or conversion of these securities will reduce Ford's automotive debt by about $3 billion and lower interest costs by about $190 million per year, the filing said. It will also result in a 2011 first-quarter charge of up to about $60 million.

"We remain focused on reducing our automotive debt as the core automotive business continues to strengthen," Lewis Booth, Ford executive vice president and chief financial officer, said in the filing.

The automaker is based in Dearborn, Mich.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.