Hyperdrive
Ford to Cut Debt Costs in Half by Retiring ‘Covid Bonds’
- Automaker retiring ‘Covid bonds’ issued at onset of pandemic
- Rolling out a sustainable financing strategy set to ESG goals
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Ford Motor Co. is aiming to cut its borrowing costs by more than half as it repurchases $5 billion in junk-rated debt and seeks to set a path to return to an investment-grade credit rating.
The automaker said in a Thursday statement that it’s initiating a $5 billion cash tender offer to repurchase a significant chunk of the $8 billion in junk bonds it issued to bolster its balance sheet as it shut down factories at the onset of the pandemic in April 2020. As auto sales collapsed, Ford issued what it calls “Covid bonds” a month after becoming the largest fallen angel when its debt was cut to non-investment grade by S&P Global Ratings.