Fitch gives Ford convertible notes BB+

Fitch Ratings said it rated Ford Motor Co.'s upcoming issuance of senior unsecured convertible notes due 2026 BB+/RR4 ratings.

Ford's long-term issuer default rating is BB+, and its outlook is negative.

Proceeds from the $2 billion of notes, plus an added $300 million over-allotment option, will be used for general corporate purposes, including the potential repayment of debt.

“Fitch expects the issuance of the proposed convertible notes to provide Ford with incremental liquidity in the near term while potentially providing the company with an option to repay higher-cost debt over the longer term. With the convertible option, Fitch expects cash interest costs on the proposed notes to be meaningfully lower than most of Ford's other senior unsecured debt, especially the notes that the company issued in 2020,” the agency said in a press release.

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