Breaking The Bank! Ford Puts Up The House And Barn, Seeks $18 Billion In Credit

Today, in a move that sounds an awful lot like a plot line from a Steinbeck novel of the 30's set in dust-bowl Americana, FoMoCo's asking JPMorgan Chase, Citigroup and Goldman Sachs to help the automaker finance $18 billion in secured (meaning backed by tangible assets like equipment, buildings, nameplates, water coolers, etc). Except, in this Steinbeck novel, instead of the Joad family, Johnny's telling the story of Pa Mulally and Momma Ford asking the bank for a loan. The bank tells them they'll have to sign over the farm, the barn and all of FoMoCo's domestic assets — plus Volvo and Ford Credit just to be safe. That's right, the Ford family will be putting up all of that for a measly $8 billion in a secured credit line to replace an existing unsecured $6.3 billion loan plus a new $7 billion secured term loan and some stock-insured loans amounting to around $3 billion. I guess that beats running out of cash and having to declare bankruptcy. Hopefully for the boys and girls in Dearborn, this won't end like the final scene in that Steinbeck novel — you know, a scene of Bill Ford breast-feeding a starving Alan Mulally, with FoMoCo CFO Don LeClair crying in the corner.

Ford Plans $18 Billion in Debt, Some Backed by Plants [Bloomberg]

Related:
Breaking! Ford Announces Confusing Earnings Restatement — What's A Few Hundred Million Anyway?; Breaking Yesterday! Try Not To Smack Your Head On The Low Bar Of October Sales Expectations [internal]