Ford to extend revolving credit; raise $3 bln equity

Ford Motor Co said on Monday it would pay back in part and extend by two years $10.7 billion of secured debt and issue some $3 billion of stock and equity linked securities to improve its balance sheet.

Ford, which posted a surprise third-quarter profit of nearly $1 billion earlier on Monday, said it would pay down as much as $2.5 billion of its secured debt due in December 2011 and extend the remainder by two years to November 2013.

The moves come as Ford faces pressure to restructure and reduce its long term debt. The automaker borrowed more than $23 billion in late 2006 to finance its restructuring and is the only large U.S. automaker to avoid bankruptcy in 2009.

Ford stock rallied 8.3 percent Monday on the New York Stock Exchange after the automaker posted a quarterly profit while Wall Street was looking for a loss. [ID:nN02411585] The stock fell 3.8 percent to $7.29 in aftermarket trade after Ford announced the equity raise plan, debt repayment and extension.

Ford said it had commitments from lenders to extend $6 billion of the remaining $8 billion of debt from the secured revolver. It said it was a long way toward completing the extension after working with lenders for several weeks.

The automaker said it would offer $2 billion of senior convertible notes due in 2016 that are convertible at Ford's option into common stock, cash or a combination of the two.

The lead underwriters may purchase another $300 million of notes and the pricing is expected to go out later on Monday from the lead underwriters.

Barclays Capital, BofA Merrill Lynch, Citi, Deutsche Bank Securities, Goldman Sachs & Co, J.P. Morgan, Morgan Stanley and RBS are acting as joint book-running managers of the senior convertible notes offering.

BNP Paribas and HSBC also will be included in the underwriting syndicate for the offering.

Ford also said it would start an equity distribution program to issue $1 billion of common stock over a period of time not to begin before December. The equity distribution period is to begin once a lockup period is completing on the convertible notes in 30 days and could take several months.