Shortly after receiving once again its investment-grade bond rating from Moody’s Investors Service last month, Ford has announced that it has sold $1.5 billion worth of benchmark bonds. The American automaker says this is its first sale following the bond upgrade.
With this upgrade, a five-year Ford bond is worth 230 basis points more than a similar Treasury bond. Over the life of the bond, this works out to a 2.3% richer yield. These bond sales allow Ford and other companies that sell notes to raise money without needing to resort to mortgaging assets. Ford had famously mortgaged its iconic logo around the start of the last recession. It paid off this mortgage earlier this year.
via Auto Finance News.