Ford 2009 Annual Report Download - page 41

Management’s Discussion and Analysis of Financial Condition and Results of Operations
Ford Motor Company | 2009 Annual Report 39
marketable securities or cash proceeds therefrom; 100% of the stock of our principal domestic subsidiaries, including Ford
Credit (but excluding the assets of Ford Credit); certain intercompany notes of Volvo Holding Company Inc. (a holding
company for Volvo), and Ford Motor Company of Canada, Limited; 66% to 100% of the stock of all major first tier foreign
subsidiaries (including Volvo); and certain domestic intellectual property, including trademarks.
The Credit Agreement requires ongoing compliance with a borrowing base covenant and contains other restrictive
covenants, including a restriction on our ability to pay dividends. The Credit Agreement prohibits the payment of dividends
(other than dividends payable solely in stock) on Ford Common and Class B Stock, subject to certain limited exceptions.
In addition, the Credit Agreement contains a liquidity covenant requiring us to maintain a minimum of $4 billion in the
aggregate of domestic cash, cash equivalents, loaned and marketable securities and short-term VEBA assets and/or
availability under the revolving credit facility.
With respect to the borrowing base covenant, we are required to limit the outstanding amount of debt under the Credit
Agreement as well as certain permitted additional indebtedness secured by the collateral described above such that the
total debt outstanding does not exceed the value of the collateral as calculated in accordance with the Credit Agreement
(the "Borrowing Base value").
The following table provides detail of Borrowing Base values for various categories of collateral (in millions, except
percentages):
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(OLJLEOH9DOXHD(OLJLEOH9DOXHD
(OLJLEOH9DOXHD
$GYDQFH
$GYDQFH$GYDQFH
$GYDQFH5DWH
5DWH5DWH
5DWH
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%RUURZLQJ%DVH
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As of December 31, 2009, the Borrowing Base value and the total outstanding amount of debt secured by collateral
were $24,563 million and $13,206 million, respectively, compared with $23,183 million and $7,354 million, respectively, at
December 31, 2008. This resulted in a collateral coverage ratio of 1.86 to 1 at December 31, 2009, compared with a
collateral coverage ratio of 3.15 to 1 at December 31, 2008. The Borrowing Base value increased by $1.3 billion over the
corresponding value at December 31, 2008, more than explained by improved equity in Ford Credit and the inclusion of
Ford Brasil Ltda. The debt secured by collateral increased by about $6 billion from the amount of debt secured at
December 31, 2008, reflecting the (i) $10.1 billion revolving loan advanced to us on February 3, 2009, (ii) repurchase in
March 2009 of $2.2 billion principal amount of term loans and (iii) repayment in December 2009 of $1.9 billion principal
amount of revolving loans made in connection with the amendment and extension described above. On a basis that
assumes the revolving loan facility is fully drawn, the collateral coverage ratio at December 31, 2009 (1.84 to 1) increased
from that at December 31, 2008 (1.33 to 1).
In addition to customary payment, representation, bankruptcy, and judgment defaults, the Credit Agreement contains
cross-payment and cross-acceleration defaults with respect to other debt for borrowed money, and a change in control
default.