Ford Reduces Debt 38 Percent With Buybacks of Bonds, Loans

Ford Motor Co., slashing costs to stay off government aid, said it eliminated $9.9 billion of borrowings as it completed its largest debt restructuring.

The transactions, which reduce automotive debt by 38 percent, will “substantially strengthen Ford’s balance sheet,” the second-biggest U.S. automaker said today in a statement. Ford had sought to trim as much as $11.3 billion in notes and loans in a three-pronged effort.

“Anything that takes debt off your balance sheet makes it easier to survive,” said Shelly Lombard, an analyst for bond researcher Gimme Credit in New York. “Does it ensure their survival? No. But does it give them a better chance than General Motors and Chrysler? Absolutely.”

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- Posted: 2009-04-06 08:37:35

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