Ford 2007 Annual Report Download - page 86

Notes to the Financial Statements
84 Ford Motor Company | 2007 Annual Report
NOTE 16. DEBT AND COMMITMENTS (Continued)
Based on the Borrowing Base value of $22.3 billion and the total outstanding amount of debt secured by collateral of
$7.5 billion, the resulting collateral coverage ratio is 2.96. Assuming the $11.5 billion revolving credit facility were fully
drawn and the $1.5 billion of non-loan exposure permitted under the facility were fully utilized, the collateral coverage ratio
would have been 1.12.
Events of Default. In addition to customary payment, representation, bankruptcy and judgment defaults, the Credit
Agreement contains cross-payment and cross-acceleration defaults with respect to other debt for borrowed money, and a
change in control default.
Other Automotive Credit Facilities. At December 31, 2007, we had $1.6 billion of other Automotive credit facilities with
financial institutions, including $1.1 billion of worldwide Automotive unsecured credit facilities and about $500 million of
local credit facilities to foreign Automotive affiliates. Of the lines available for use, 51% (or about $500 million) are
committed through June 30, 2009, including 37% (or about $400 million) which are committed through
December 31, 2011. The worldwide credit facilities may be used, at Ford's option, by any of its direct or indirect, majority-
owned subsidiaries on a guaranteed basis. All of the worldwide unsecured credit facilities 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 would limit our ability to obtain funding.
Financial Services Sector
Credit Facilities. At December 31, 2007, Ford Credit and its majority-owned subsidiaries, including FCE Bank, plc
("FCE"), had $3 billion of contractually-committed unsecured credit facilities with financial institutions, of which $2.1 billion
were available for use. Of the lines available for use, 56% (or about $1.1 billion) are committed through June 30, 2009,
including 19% (or about $400 million) which are committed through December 31, 2011. Of the $3 billion, $500 million
constitute Ford Credit bank lines (of which about $200 million are worldwide) and $2.5 billion are FCE bank lines (of which
$2.4 billion are worldwide). The Ford Credit worldwide credit facilities may be used, at Ford Credit's option, by any of its
direct or indirect, majority-owned subsidiaries. Similarly, the FCE worldwide credit facilities may be used, at FCE's option,
by any of FCE's direct or indirect, majority-owned subsidiaries. Ford Credit or FCE, as the case may be, will guarantee
any such borrowings. All of the worldwide credit facilities 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.
In addition, at December 31, 2007, banks provided $17.2 billion of contractually-committed liquidity facilities to support
Ford Credit's two on-balance sheet, asset-backed commercial paper programs; $16.9 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, 48% (or $8 billion) are committed through
June 30, 2012, and the remainder are committed for a shorter period of time. Utilization of each of these facilities is
subject to conditions specific to each program and Ford Credit having a sufficient amount of eligible assets for
securitization. The FCAR program must be supported by liquidity facilities equal to at least 100% of its outstanding
balance. At December 31, 2007, $16.7 billion of FCAR's bank liquidity facilities were available to support FCAR's asset-
backed commercial paper, subordinated debt or FCAR's purchase of Ford Credit's asset-backed securities, and the
remaining $200 million of bank liquidity facilities were available to support FCAR's purchase of Ford Credit's asset-backed
securities. The Motown Notes program must be supported by liquidity facilities equal to at least 5% of its outstanding
balance. The Motown Notes program bank liquidity facilities are available to support the issuance of Motown Notes, but
these facilities cannot be accessed directly to fund the purchase of Ford Credit's wholesale receivables. Ford Credit is not
presently issuing Motown Notes and does not intend to use this program in the foreseeable future as there is presently a
lack of investor demand for extendible commercial paper. At December 31, 2007, the outstanding balances were
$13.7 billion for the FCAR program and zero for the Motown Notes program.
Committed Liquidity Programs. Ford Credit and its subsidiaries, including FCE, have entered into agreements with a
number of bank-sponsored asset-backed commercial paper conduits ("conduits") and other financial institutions, whereby
such parties are contractually committed, at Ford Credit's option, to purchase from Ford Credit's eligible retail or
wholesale assets or to purchase or make advances under asset-backed securities backed by retail or wholesale assets
for proceeds up to $30.8 billion at December 31, 2007 ($18.1 billion retail and $12.7 billion wholesale) of which $10 billion