Ford plans to borrow $18 billion

The company said that it needs the financing to address near- and medium-term negative operating-related cash flow and to fund restructuring which involves plans to close 16 manufacturing plants following a fall in demand. Ford added that finances would also be used to protect against a recession or other unanticipated events. The financing transactions consist of a five-year secured revolving credit facility of $8 billion that is intended to replace Ford's existing unsecured credit facilities of $6.3 billion. The company also said it plans to take out a secured term loan of approximately $7 billion and unsecured capital market transactions of approximately $3 billion. The borrowings will be secured by assets, including domestic manufacturing facilities, all or a portion of the stock of certain subsidiaries including Volvo, and up to $4 billion of domestic cash. Ford expects transactions to close before December 31, 2006, and when completed, the company predicts to have liquidity of $38 billion, consisting of gross cash and available credit facilities.