By Ronda Fears
Nashville, Tenn., Jan. 25 - Ford Motor Co. sold $4.5 billion of 30-year convertible trust preferreds, which had been upsized from $3 billion, at par of $50 to yield 6.5% and with a 22.5% initial conversion premium. The yield came at the middle of revised guidance that put the dividend at 6.25% to 6.75% versus the original talk of 7.0% to 7.5%. The premium also came at about the midpoint of revised price talk of 20% to 25%, compared to original guidance for an 18% to 22% premium.
Book-runner for the registered offering was Goldman Sachs & Co. Joint lead managers were JPMorgan, Morgan Stanley and Salomon Smith Barney.
The offering set a new record for a convertible offering size. The previous record was Tyco International's $3.45 billion zero-coupon deal in November 2000. Ford's offering is part of a recapitalization plan that also includes a reduction in workforce of about 10%, $1 billion in asset sales and a cut of about one-third to the common stock dividend, among many other initiatives.
Terms of the new deal are:
Issuer: Ford Motor Co.
Amount: $4.5 billion
Greenshoe: $500 million
Book-Runner: Goldman Sachs & Co.
Lead Managers: JPMorgan, Morgan Stanley and Salomon Smith Barney
Maturity Date: Jan. 15, 2032
Dividend: 6.5%
Issue Price: par, $50
Yield: 6.5%
Conversion Premium: 22.5%
Conversion Price: $17.70
Conversion Ratio: 2.8249
Call: non-callable for five years
Expected Rating(s): Moody's: Baa1 (expected)
| S&P: BBB-
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| Settlement Date: | Jan. 30
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