Ford to Reduce Debt by an Additional $3 Billion Through Trust Preferred Securities Redemption

Ford Motor Company F announced that on March 15, 2011 all of the outstanding 6.50% Cumulative Convertible Trust Preferred Securities (liquidation amount $50 per trust preferred security) F of its subsidiary trust, Ford Motor Company Capital Trust II, will be redeemed for cash at a redemption price of $50.33 per trust preferred security, plus accrued and unpaid distributions of $0.5416667 per trust preferred security. The redemption of the trust preferred securities will result from Ford redeeming for cash all of the $2.98 billion aggregate principal amount outstanding of its 6.50% Junior Subordinated Convertible Debentures held by Ford Motor Company Capital Trust II, as Ford continues to aggressively strengthen its balance sheet. Instead of having trust preferred securities redeemed for cash, holders may convert their trust preferred securities at any time until 5 p.m. EDT, March 14, 2011, into shares of Ford common stock at a rate of 2.8769 shares per trust preferred security (liquidation amount $50 per trust preferred security) converted (equivalent to a conversion price of $17.38 per share of Ford common stock). Redemption or conversion of these securities will result in a reduction of about $3 billion in Automotive debt and lower annualized interest costs of about $190 million. Redemption of these securities will also result in a 2011 first quarter charge of up to about $60 million. "We remain focused on reducing our Automotive debt as the core automotive business continues to strengthen," said Lewis Booth, Ford executive vice president and chief financial officer. "We are pleased with the progress we have made, and we are committed to continuing to improve our balance sheet to lay a solid foundation for a strong and profitably growing business in years to come."