Ford to Pay Down Debt
Ford Motor Co. will prepay almost half of the $6.7 billion it owes on a revolving credit note due in 2013 as part of its ongoing effort to reduce its debt and strengthen its balance sheet, The Detroit News reported.
The move was detailed in a filing this morning with the U.S. Securities and Exchange Commission. It said the company would make an early payment of $3 billion on April 6.
That will cut Ford's total debt to just under $32 billion and reduce the company's interest expenses.
Ford executives have acknowledged that the company is still saddled with too much debt, putting it at a competitive disadvantage versus General Motors Co. and Chrysler Group LLC, both of which were able to erase much of their debt during their bankruptcy reorganizations last year.
Ford was the only U.S. automaker that did not file for bankruptcy and the only one to pass on a taxpayer bailout. That has left it with more debt, but also paid big dividends with consumers, allowing Ford to steadily increase its share of the U.S. market at the expense of its cross-town rivals.
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