Ford 2009 Annual Report Download - page 40

Management’s Discussion and Analysis of Financial Condition and Results of Operations
38 Ford Motor Company | 2009 Annual Report
Equity and Equity-Linked Issuances. On May 18, 2009, we issued 345 million shares of Ford Common Stock pursuant
to a public offering at a price of $4.75 per share, resulting in net proceeds totaling $1.59 billion.
In August 2009, pursuant to an equity distribution agreement with a certain broker-dealer, we issued from time to time
in market transactions 71.6 million shares of Ford Common Stock for an aggregate price of $565 million, and used the
proceeds to purchase $556 million principal amount of outstanding Ford Credit debt securities maturing prior to 2011, and
pay related accrued interest of $9 million. Pending their maturity, the Ford Credit debt securities are reflected in
Automotive gross cash and, when the debt securities mature, their par value will be paid in cash by Ford Credit. For
additional detail, see Note 1 of the Notes to the Financial Statements.
In November 2009, we issued $2.875 billion principal amount of 4.25% Senior Convertible Notes due
November 15, 2016 ("2016 Convertible Notes") in a public offering, resulting in net proceeds totaling $2.81 billion. These
notes are convertible, under certain circumstances, into Ford Common Stock at a conversion price of approximately
$9.30 per share. Upon conversion, we will have the right to deliver, in lieu of shares of Ford Common Stock, cash or a
combination of cash and Common Stock. At December 31, 2009 the carrying value of the debt was $2.2 billion (which
excludes the equity component of the convertible feature of this note valued at $704 million), reflecting the fair value of the
debt obligation at date of issuance.
On December 4, 2009, we entered into another equity distribution agreement with certain broker-dealers pursuant to
which we would offer and sell shares of Ford Common Stock from time to time for an aggregate offering price of up to
$1 billion. Sales of Ford Common Stock under this equity distribution agreement are expected to be made over a several-
month period by means of ordinary brokers' transactions on the New York Stock Exchange at market prices or as
otherwise agreed. Through December 31, 2009 and February 15, 2010, we issued 9.8 million and 41.9 million shares of
Ford Common Stock for an aggregate price of $97 million and $470 million, respectively, resulting in net proceeds of
$96 million and $466 million, respectively, which will be used for general corporate purposes.
Secured Credit Agreement. Due to concerns about instability in the capital markets and the uncertain state of the global
economy, on February 3, 2009, we borrowed $10.1 billion under the revolving credit facility of the Credit Agreement to
ensure access to these funds. As expected, the $890 million commitment of Lehman Commercial Paper Inc. ("LCPI"), one
of the lenders under the facility, was not funded because LCPI filed for protection under Chapter 11 of the U.S. Bankruptcy
Code on October 5, 2008. LCPI subsequently assigned $110 million of its revolving commitment to other lenders, and
$89 million of these assignee lenders' revolving commitments were funded in the third quarter of 2009. On July 10, 2009,
we terminated the remaining LCPI commitment of $780 million. We also received an additional $10 million under the
revolving credit facility in the third quarter of 2009 for amounts previously committed but not yet received.
As disclosed in our Current Report on Form 8-K dated November 24, 2009, on that date we entered into the Fourth
Amendment to the Credit Agreement. Prior to the Fourth Amendment, revolving lenders held commitments totaling
$10.7 billion that matured on December 15, 2011. As a result of the Fourth Amendment, lenders now have commitments
totaling $7.2 billion in a new revolving facility that matures on November 30, 2013 and such lenders converted $724 million
of their previously existing revolving loans to a new term loan that matures on December 15, 2013. The new term loan has
the same pricing, maturity, and other terms as the existing term loan, but is not subject to mandatory prepayments as is the
existing term loan. Those lenders who agreed to extend the maturity of their revolving commitments had the option to
reduce their commitments by up to 25%, and received a 1 percentage point increase in interest rate margins, an increase
in quarterly fees, and payment of an upfront fee.
Pursuant to these arrangements, on December 3, 2009, $2.3 billion of the revolving loan was repaid to effect the
commitment reductions elected by extending lenders and certain other extending lenders increased their revolving loan
commitments by, and funded, an aggregate of $400 million, thereby resulting in a net cash repayment by us of $1.9 billion.
Lenders with revolving commitments totaling $886 million elected not to extend those commitments, which will mature on
the original maturity date of December 15, 2011.
At December 31, 2009, the revolving credit facility of the Credit Agreement totaled $8.1 billion, of which (i) $7.9 billion
was utilized (including $418 million to support letters of credit), (ii) $7.2 billion matures on November 30, 2013 and
(iii) $886 million matures on December 15, 2011. Also on December 31, 2009, the term loans outstanding under the Credit
Agreement totaled $5.3 billion.
The borrowings of the Company, the subsidiary borrowers, and the guarantors under the Credit Agreement are secured
by a substantial portion of our domestic Automotive assets (excluding cash). The collateral includes a majority of our
principal domestic manufacturing facilities, excluding facilities to be closed, subject to limitations set forth in existing public
indentures and other unsecured credit agreements; domestic accounts receivable; domestic inventory; up to $4 billion of