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Ford seeks to amend loan to revise revolver maturity, size, pricing
By Sara Rosenberg
New York, Nov. 2 - Ford Motor Co. is looking to amend its credit facility to extend the revolver maturity to Nov. 30, 2013 from Dec. 15, 2011, reduce the size of the revolver and increase pricing by 100 basis points on the extended debt, according to a news release.
On top of the higher pricing, extending revolver lenders will get an increase in fees and an upfront fee.
Under the proposal, each revolver lender that agrees to extend the maturity of its commitments may reduce its commitment by up to 25% percent.
To the extent the company's reduced revolver commitment exceeds certain specified levels, that excess would be converted into a new term loan maturing on Dec. 15, 2013.
Ford would repay revolver loans to the extent necessary to effect the commitment reductions on Dec. 3.
In addition, the amendment would expand existing limitations on debt prepayments and repurchases to allow for further balance sheet improvements.
Responses are due on Nov. 18.
So far, certain revolver lenders have indicated that they intend to accept the proposal and extend about $6 billion of commitments.
Ford also announced on Monday that it is planning an about $2 billion senior convertible notes offering and an equity distribution agreement, under which it may offer and sell shares of its common stock from time to time for an aggregate offering price of up to $1 billion.
Proceeds from these offerings will be used for general corporate purposes.
"These actions support the third pillar of our One Ford plan - finance the plan and improve our balance sheet," said Alan Mulally, president and chief executive officer, in the release.
"We expect the moves will enhance Ford's automotive liquidity and, over time, reduce the company's debt burden, providing an additional cushion given the still uncertain state of the economy."
Ford is a Dearborn, Mich.-based automotive company.
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