Ford 2006 Annual Report Download - page 77

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75
Notes to the Financial Statements
75
NOTE 15. DEBT AND COMMITMENTS (Continued)
Financial Services Sector
Credit Facilities. At December 31, 2006, Ford Credit and its majority-owned subsidiaries, including FCE Bank plc
("FCE"), had $3.8 billion of contractually-committed credit facilities with financial institutions, of which $2.6 billion were
available for use. Of the lines available for use, 26% (or $700 million) are committed through June 30, 2010, and the
remainder are committed for a shorter period of time. Of the $3.8 billion, $1.1 billion constitute Ford Credit facilities
($700 million global and about $400 million non-global) and $2.7 billion are FCE facilities ($2.6 billion global and about
$100 million non-global). The global credit facilities may be used, at Ford Credit's or FCE's option, by any of its direct or
indirect majority-owned subsidiaries. Ford Credit or FCE, as the case may be, will guarantee any such borrowings. All of
the global credit facilities have substantially identical contract terms (other than commitment amounts) and are free of
material adverse change clauses, restrictive financial covenants (for example, debt-to-equity limitations and minimum net
worth requirements) and credit rating triggers that could limit our ability to obtain funding.
Additionally, at December 31, 2006, banks provided $18.9 billion of contractually-committed liquidity facilities
exclusively to support Ford Credit's two on-balance sheet, asset-backed commercial paper programs; $18.6 billion
supported Ford Credit's retail securitization program ("FCAR") and $300 million supported Ford Credit's Motown NotesSM
wholesale securitization program ("Motown Notes"). Of the contractually-committed liquidity facilities, 45% (or $8.6 billion)
are committed through June 30, 2011. The FCAR and Motown Notes programs must be supported by liquidity facilities
equal to at least 100% and 5%, respectively, of their outstanding balance. At December 31, 2006, $18.1 billion of FCAR's
bank liquidity facilities were available to support FCAR's asset-backed commercial paper or subordinated debt. The
remaining $500 million of available credit lines could be accessed for additional funding if FCAR issued additional
subordinated debt. Utilization of these facilities is subject to conditions specific to each program and to Ford Credit having
a sufficient amount of securitizable assets. At December 31, 2006, the outstanding balances were $13.6 billion for the
FCAR program and $3 billion for the Motown Notes program.
Committed Liquidity Programs. Ford Credit has entered into agreements with a number of bank-sponsored asset-
backed commercial paper conduits ("conduits") and other financial institutions pursuant to which such parties are
contractually committed, at Ford Credit's option, to purchase from Ford Credit's eligible retail or wholesale assets or to
make advances under asset-backed securities backed by wholesale assets for proceeds up to $29.1 billion ($16.9 billion
retail and $12.2 billion wholesale). These committed liquidity programs have varying maturity dates, with $20.8 billion
having an original term of 364 days, and the balance having maturities between 2008 and 2011. Ford Credit's ability to
obtain funding under these programs is subject to it having a sufficient amount of assets eligible for these programs. At
December 31, 2006, $9.7 billion of these commitments were in use. These programs are free of material adverse change
clauses, restrictive financial covenants (for example, debt-to-equity limitations and minimum net worth requirements) and
credit rating triggers that could limit Ford Credit's ability to obtain funding. However, the unused portion of these
commitments may be terminated if the performance of the underlying assets deteriorates beyond specified levels. Based
on our experience and knowledge as servicer of the related assets, we do not expect any of these programs to be
terminated due to such events.
In addition, Ford Credit has a multi-year committed liquidity program for the purchase of up to $6 billion of unrated
asset-backed securities that at its option can be supported with various retail, wholesale, or lease assets. Ford Credit's
ability to obtain funding under this program is subject to it having a sufficient amount of assets available to issue the
securities. This program is also free of material adverse change clauses, restrictive financial covenants (for example,
debt-to-equity limitations or minimum net worth requirements), and credit rating triggers that could limit Ford Credit's ability
to obtain funding. Through December 31, 2006, Ford Credit had utilized $2.8 billion. The programs was increased from
$4 billion to $6 billion as of January 1, 2007.