Ford Motor Company completed
the transfer of its UAW retiree health care liabilities to the UAW
Retiree Medical Benefits Trust (“VEBA Trust”).
- An Amortizing Guaranteed Secured Note maturing June 30,
2022, with an original principal amount of $6.7 billion with a
corresponding estimated present value of $4.8 billion (“New Note A”);
- An
Amortizing Guaranteed Secured Note maturing June 30, 2022, with an
original principal amount of $6.5 billion with a corresponding
estimated present value of $4.7 billion (“New Note B” and, together
with New Note A, the “New Notes”);
- Warrants expiring on Jan. 1, 2013, to purchase 362 million shares of Ford Common Stock at a price of $9.20 per share;
- Assets in a Temporary Asset Account consisting of cash and marketable securities with an estimated value of $620 million; and
- Assets in Ford’s internal VEBA trust consisting of cash and marketable securities with an estimated value of $3.5 billion.
Ford made the following payments on the New Notes:
- A scheduled payment of $1.4 billion on New Note A;
- An additional pre-payment of $500 million on New Note A; and
- A
scheduled payment of $610 million on New Note B, which was paid in
cash, in lieu of Ford's option of making New Note B payments in Ford
Common Stock. Had Ford chosen to pay in stock, the shares would have
been issued at the 30-day volume weighted average price of $9.13, while
Ford Common Stock closed at $10 on Dec. 31.
As a result of these actions, the New Notes will represent about $7 billion in incremental debt on Ford’s balance sheet.
“The transfer of these health care liabilities to the VEBA Trust is
the culmination of several years of work and will significantly improve
our competitiveness in the U.S.,” said Lewis Booth, Ford’s chief
financial officer. “We have removed a substantial health care
liability from our balance sheet and have significantly reduced health
care expenses. We also have shown confidence in our liquidity and One
Ford plan by pre-paying $500 million of debt owed to the VEBA Trust.”
Additional details about this transaction are included in Ford’s
Current Report on Form 8-K filed today with the U.S. Securities and
Exchange Commission.
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