Ford sets premium to be paid in conversion offer for 6.5% trust preferreds

By Angela McDaniels

Seattle, July 30 - Ford Motor Co. said the premium payable in the conversion offer for Ford Motor Co. Capital Trust II's 6.5% cumulative convertible trust preferred securities will be 1.7468 shares of Ford common stock per trust preferred.

The number of shares was determined by dividing a $14.25 premium by $8.1576, the volume-weighted average sale price of Ford common stock on July 25, July 26 and July 27.

Each trust preferred has a liquidation value of $50 and is convertible into 2.8249 shares of Ford common stock. Accordingly, holders who elect to convert will receive a total of 4.5717 Ford shares for each trust preferred.

The conversion offer will expire at 5 p.m. ET on July 31, and the settlement date is expected to be Aug. 3. The offer began on July 2.

If all the trust preferreds that were outstanding at the beginning of the offer were tendered for conversion, Ford would issue 457,163,141 shares of common stock.

The Dearborn, Mich.-based automotive company said that the trust preferreds, which were issued in 2002, have a total liquidation value of about $5 billion.

The subsidiary trust's sole assets are $5.2 billion of Ford's 6.5% junior subordinated convertible debentures due 2032, which will be canceled to the extent trust preferreds are converted into Ford common stock. Through the debentures and other instruments, Ford has effectively guaranteed the trust preferreds.

Georgeson, Inc. is the information agent (888 605-7541).

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