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S&P assigns Ford convertibles BB+
S&P said it assigned BB+ issue-level and 3 recovery ratings to Ford Motor Co.'s proposed $2 billion of convertible senior notes due 2026. The 3 recovery rating indicates an expectation for meaningful recovery (50%-70%; rounded estimate: 65%) in default.
The BB+ rating is consistent with Ford’s other senior unsecured debt.
Ford could upsize the transaction by up to $300 million to cover over-allotments. This increase would not affect the issue-level or recovery ratings on the proposed convertible notes, S&P said.
Proceeds are expected to be used for general corporate purposes, including the potential repayment of debt.
“The issuance has no material impact on the company's cash flow adequacy metrics, and there is potential for cash interest savings if higher-cost debt is repaid in the future,” the agency said in a press release.
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