[q url="http://www.moneyweb.co.za/shares/international_news/477001.htm"]In arranging to borrow as much as $18 billion, Ford Motor Co. is making a massive bet that by pledging its assets as collateral, it can take advantage of buoyant debt markets to help pay for a difficult and costly restructuring.
The 103-year-old auto maker will pledge practically all its U.S. automotive assets and stakes in financial arm Ford Motor Credit Co. and its Volvo unit as collateral for much of the new debt. The move underscores the depth of the hole Ford must escape as falling U.S. market share and high labor costs hit its operations, hampering its ability to borrow without backing from pieces of its business.
Ford -- which first mentioned the borrowing plans in October -- said it expects to obtain $15 billion in secured loans, comprising an $8 billion, five-year credit line from banks and a $7 billion loan that will be held by institutional investors, including hedge funds. The borrowing amount is roughly equal to Ford's market value.
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Tags: recovery | maker | firm | depth | debt | CREDIT | COLLATERAL | bets | auto | Advantage | U.S. | MOTOR | Ford
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