Ford To Buy Back $5B High-Interest Debt: What You Need To Know

$Ford Motor(F.US)$ said on Thursday it has launched cash tender offers to buy back up to $5 billion of debt securities. The Dearborn Michigan-based automaker said it is looking to buy back a series of securities that are due between 2023 and 2047 and that it would fund with cash on the balance sheet.“Assuming $5 billion of bonds are tendered, Ford expects to incur a charge in the range of $1.0-1.2 billion for debt extinguishment,” the company said, adding that it expects to classify it as a special item in its fourth-quarter results.

The automaker had lost its investment-grade status in March last year as the coronavirus outbreak pummeled vehicle sales and production following which it raised new funds with a three-part debt offering at an interest of between 8.50% and 9.625% on the new debt securities.