Tags: ford | defer | quarterly | payments | energy | loan

Ford Will Defer Some Quarterly Payments on $5.9B US Energy Loan

Ford Will Defer Some Quarterly Payments on $5.9B US Energy Loan
(Viktor Bondar/Dreamstime)

Friday, 31 July 2020 08:00 AM

Ford Motor Co. said on Friday it had won approval to defer some quarterly payments due on its U.S. Energy Department retooling loan, but added it will repay the loan on time by June 2022.

In September 2009, Ford was awarded a $5.9 billion low-cost government loan, a key source of liquidity in the aftermath of the financial crisis.

The second-largest U.S. automaker said its loan was modified in June to reduce quarterly principal payments from $148 million to $37 million. Ford said it has $1.26 billion of remaining principal left on the loan.

Ford (F) said "with COVID-19 related economic uncertainty remaining, we believe that is worthwhile to further strengthen our balance sheet and increase liquidity to optimize our financial flexibility." The company noted that if it opts to pay a dividend, repurchase shares above a certain threshold, or provide security to other lenders it will have to revert to the original payment schedule.

The company said Friday that "deferring a portion of the principal until the maturity date will also result in incremental interest cost to Ford, in addition to the cost to modify the loan. All costs associated with the modification were covered by Ford through a higher interest rate."

But it added, "the financing remains very cost-effective."

The Energy Department did not immediately comment.

© 2020 Thomson/Reuters. All rights reserved.


   
1Like our page
2Share
Companies
Ford Motor Co. said on Friday it had won approval to defer some quarterly payments due on its U.S. Energy Department retooling loan, but added it will repay the loan on time by June 2022.
ford, defer, quarterly, payments, energy, loan
218
2020-00-31
Friday, 31 July 2020 08:00 AM
Newsmax Media, Inc.
 

Newsmax, Moneynews, Newsmax Health, and Independent. American. are registered trademarks of Newsmax Media, Inc. Newsmax TV, and Newsmax World are trademarks of Newsmax Media, Inc.

NEWSMAX.COM
MONEYNEWS.COM
© Newsmax Media, Inc.
All Rights Reserved