By Kenneth Lim
Boston, Dec. 6 - Ford Motor Co. priced an upsized $4.5 billion of 30-year convertible senior notes at the rich end of revised talk on Wednesday, at a coupon of 4.25% and an initial conversion premium of 25%.
The notes, which were offered at par, were talked a coupon of 4.25% to 4.75% and an initial conversion premium of 23% to 25%. Original guidance was for a coupon of 4.75% to 5.25% and an initial conversion premium of 23% to 27%.
The size of the deal was originally $3 billion. The over-allotment option remains at a further $450 million.
Citigroup, Goldman Sachs, JP Morgan, Deutsche Bank, Lehman Brothers, Merrill Lynch, Pierce, Fenner & Smith and Morgan Stanley were the bookrunners of the registered off-the-shelf offering.
The notes are non-callable for the first seven years, and may be called subject to a hurdle at 140% of the conversion price in years eight to 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 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, fund restructuring and to provide a liquidity cushion against unexpected events. The revolving credit facility portion of that senior secured debt was increased on Wednesday to between $10.5 billion and $11.5 billion, from the previously announced $7 billion to $8 billion.
| Issuer: | Ford Motor Co.
|
| Issue: | Convertible senior unsecured notes
|
| Bookrunner: | Citigroup, Goldman Sachs, JP Morgan, Deutsche Bank, Lehman Brothers, Merrill Lynch, Pierce, Fenner & Smith and Morgan Stanley
|
| Amount: | $4.5 billion
|
| Greenshoe: | $450 million
|
| Maturity: | Dec. 15, 2036
|
| Coupon: | 4.25%
|
| Price: | Par
|
| Yield: | 4.25%
|
| Conversion premium: | 25%
|
| Conversion price: | $9.20
|
| Conversion ratio: | 108.6957
|
| Dividend protection: | Yes
|
| Takeover protection: | Yes
|
| Call protection: | Non-callable before Dec. 20, 2013; callable subject to 140% hurdle before Dec. 20, 2016
|
| Puts: | Dec. 20, 2016; Dec. 15, 2026
|
| Price talk: | 4.25%-4.75%, up 23%-25%
|
| Pricing date: | Dec. 6 after the close
|
| Settlement date: | Dec. 15
|
| Distribution: | Rule 144A
|
| Ratings: | Moody's: Caa1; S&P: CCC+; Fitch: B-
|
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