Ford to price $3 billion 30-year convertibles Wednesday, talked at 4.75%-5.25%, up 23%-27%

By Kenneth Lim

Boston, Dec. 4 - Ford Motor Co. plans to price on Wednesday after the market closes $3 billion of 30-year cash-pay convertible senior notes, talked at a coupon of 4.75% to 5.25% and an initial conversion premium of 23% to 27%.

The notes are offered at par.

There is an over-allotment option for a further $450 million.

Citigroup, Goldman Sachs, JP Morgan, Deutsche Bank, Lehman Brothers, Merrill Lynch, Pierce, Fenner & Smith and Morgan Stanley are the bookrunners of the registered off-the-shelf offering.

The notes will be non-callable for the first seven years and may be called subject to a hurdle at 140% of the conversion price between years seven and 10. They may be put in years 10 and 20.

After the seventh year, the conversion rights will be terminated if the stock price exceeds 140% of the conversion price.

The convertibles will have dividend and takeover protection.

Dearborn, Mich.-based Ford, an auto maker, said on Nov. 27 that it was raising money through the convertible offering and another $15 billion of senior secured debt to address near- and medium-term negative operating-related cash flow, to fund restructuring and to provide a liquidity cushion against unexpected events.

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