Ford raises borrowing plan to $22 billion-$23 billion

[igor]

Ford raises borrowing plan to $22 billion-$23 billion

DETROIT (Reuters) - Ford Motor Co. (NYSE:F - news) plans to raise the amount of a borrowing plan to roughly $22 billion to $23 billion from an original $18 billion, as it increases the size of a revolving credit line and a convertible note sale.

In a Filing with the Securities and Exchange Commission, Ford said on Wednesday it is increasing the amount of a secured revolving credit facility to roughly between $10.5 billion and $11.5 billion from $8 billion.



more here:http://news.yahoo.com/s/nm/20061206/...ford_credit_dc



Igor

[FordFan]

What are they thinking now?

[igor]

Originally Posted by FordFan

What are they thinking now?

what do you mean?

this is the 18bn loan increased, because thye got a response from lenders saying they would be willing to give them more $$$ for all the collateral.

Igor

[FordFan]

Oh, I thought Ford got greedy or betted more for more money.

lol, have to say it nice of them to give more.

[jon21]

Bankers don't do it! Ford and his family will jumps country and let the other executives and all of the employee rot in America! Hehehhe! j/k.

22 BILLIONS...that is a lot MONEY! How long will it take Ford to pay it off? It is not as if Ford is making profits every quarter. Ford even said that they would burn up about 18 BILLION DOLLARS in 2007 alone.

[mikesright]

I dislike the kind of borrowing Ford is doing to get itself turned around. A heavy debt load is only going to increase the pressures and costs of Ford's bottom line in the future. With asset sales, like Ford Motor Credit and Jaguar/Land Rover, they could get the financing they need, while simplifying their business, and perhaps in FoMoCo Credit's case, perhaps get a higher rate of return on their investment (if they were able to get higher prices for their bonds).

I understand GM is doing some of the same, if it gets around to using its revolving creditline. It's not, however, and GM expects to start making positive cash flow again very soon. I doubt it's ever needed. Ford on the other hand, is going to be using it to the tune of $17 billion in negative cash flow. With the price on even the secured credit going pretty high, Ford can expect to be paying $2-$3 billion more in interest every year, bogging down any concievable turnaround.