Ford begins tender offers for up to $5 billion of notes from 10 series

By Marisa Wong

Los Angeles, Nov. 4 – Ford Motor Co. has begun cash tender offers to purchase up to $5 billion of debt securities from 10 series, according to a press release.

Ford is offering to purchase the following securities, listed in order of acceptance priority level:

• $3.5 billion 9% securities due April 2025 (Cusip: 345370CW8), with pricing based on the 1.125% U.S. Treasury due Oct. 31, 2026 and a fixed spread of 80 basis points and determined using the par call date instead of the maturity date, for a hypothetical total consideration of $1,225.84;

• $1 billion 9.625% securities due April 2030 (Cusip: 345370CX6), with pricing based on the 1.25% U.S. Treasury due Aug. 15, 2031 and a fixed spread of 140 bps and determined using the par call date instead of the maturity date, for a hypothetical total consideration of $1,478.02;

• $1,793,531,000 7.45% GlobLS due July 2031 (Cusip: 345370CA6), with pricing based on the 1.25% U.S. Treasury due Aug. 15, 2031 and a fixed spread of 145 bps, for a hypothetical total consideration of $1,366.78;

• $181,167,000 9.98% debentures due February 2047 (Cusip: 345370BW9), with pricing based on the 2.375% U.S. Treasury due May 15, 2051 and a fixed spread of 300 bps, for a hypothetical total consideration of $1,708.71;

• $151,302,000 8.9% debentures due January 2032 (Cusip: 345370BV1), with pricing based on the 1.25% U.S. Treasury due Aug. 15, 2031 and a fixed spread of 190 bps, for a hypothetical total consideration of $1,459.31;

• $3.5 billion 8.5% securities due April 2023 (Cusip: 345370CV0), with pricing based on the 0.25% U.S. Treasury due April 15, 2023 and a fixed spread of 50 bps, for a hypothetical total consideration of $1,107.92;

• $193,373,000 7.5% debentures due August 2026 (Cusip: 345370BP4), with pricing based on the 1.125% U.S. Treasury due Oct. 31, 2026 and a fixed spread of 120 bps, for a hypothetical total consideration of $1,226.61;

• $208,646,000 7.125% debentures due November 2025 (Cusip: 345370BN9), with pricing based on the 1.125% U.S. Treasury due Oct. 31, 2026 and a fixed spread of 105 bps, for a hypothetical total consideration of $1,186.00;

• $637,803,000 6.625% debentures due October 2028 (Cusip: 345370BY5), with pricing based on the 1.25% U.S. Treasury due Aug. 15, 2031 and a fixed spread of 135 bps, for a hypothetical total consideration of $1,227.60; and

• $260,471,000 6.375% debentures due February 2029 (Cusip: 345370BZ2), with pricing based on the 1.25% U.S. Treasury due Aug. 15, 2031 and a fixed spread of 155 bps, for a hypothetical total consideration of $1,207.04.

The hypothetical total consideration, given per $1,000 principal amount, was calculated on the basis of pricing for the applicable U.S. Treasury reference security as of 4 p.m. ET on Nov. 3 and assumes an early settlement date of Nov. 22. Actual pricing will be determined at 10 a.m. ET on Nov. 19.

The total consideration includes an early tender payment of $50 per $1,000 of securities tendered by 5 p.m. ET on Nov. 18, the early tender date.

The company will also pay accrued interest to but excluding the applicable settlement date.

Securities accepted for payment will be accepted based on acceptance priority level. However, all securities tendered at or prior to the early tender date will be accepted for purchase in priority to other securities tendered after the early deadline, even if those securities tendered later have a higher acceptance priority level than the securities tendered early.

The tender offers expire at 11:59 p.m. ET on Dec. 3.

Early settlement is expected to be on Nov. 22, and final settlement is expected to occur on the second business day after the expiration date.

The company said it may increase or decrease the overall tender cap at any time without extending the withdrawal deadline, which has been set at 5 p.m. ET on Nov. 18.

The tender offers are conditioned on the company completing one or more offerings of senior notes totaling at least $1 billion, proceeds of which would be used to finance or refinance new or existing green projects, assets or activities.

The company intends to fund the purchase price of all securities accepted for payment in the tender offers with cash on hand and other sources of liquidity. If the financing condition is not met, however, the company expects to instead use cash on hand to finance or refinance those green projects, assets or activities. In that case, the tender offers may be canceled or reduced in size.

Assuming $5 billion of bonds are tendered, Ford expects to incur a charge in the range of $1 billion to $1.2 billion for debt extinguishment.

The dealer managers for the tender offers are Barclays (212 528-7581 or 800 438-3242), BofA Securities, Inc. (980 683-3215, 888 292-0070 or debt_advisory@bofa.com), Mizuho Securities USA LLC (212 205-7736 or 866 271-7403), Morgan Stanley & Co. LLC (212 761-1057 or 800 624-1808) and RBC Capital Markets, LLC at (212 618-7843 or 877 381-2099).

Global Bondholder Services Corp. (866 924-2200 or 212 430-3774) is the depositary and the information agent.

The automobile manufacturer is based in Dearborn, Mich.

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