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Notes to the Financial Statements
146 Ford Motor Company | 2010 Annual Report
NOTE 19. DEBT AND COMMITMENTS (Continued)
3.6% per annum (excluding a commitment fee of 0.30% to the U.K. government). Ford of Britain has pledged
substantially all of its fixed assets, receivables and inventory to the U.K. government as collateral, and we have
guaranteed Ford of Britain’s obligations to the U.K. government related to the government’s guarantee.
U.S. Ex-Im Bank and Private Export Funding Corporation ("PEFCO") Secured Revolving Loan
On December 21, 2010, we entered into a credit agreement with PEFCO and U.S. Ex-Im Bank. Under the terms of
the agreement, PEFCO provided us with a $250 million revolving credit facility and U.S. Ex-Im Bank provided a guarantee
to PEFCO for 100% of the outstanding principal amount of the loan, which is secured by our in-transit vehicle inventory to
Canada and Mexico. Proceeds drawn on the facility will be used to finance vehicles exported for sale to Canada and
Mexico that were manufactured in our U.S. assembly plants. The facility was fully drawn in the fourth quarter of 2010 and
we had outstanding a $250 million loan at December 31, 2010. The loan matures on December 21, 2011 and bears
interest at LIBOR, at a time period that most closely parallels the advancement term, plus a margin of 1% (excluding a
facility fee of 1.6%), with interest payable monthly.
Other Automotive Credit Facilities
At December 31, 2010, we had $709 million of local credit facilities to foreign Automotive affiliates, of which
$167 million has been utilized. Of the $709 million of committed credit facilities, $147 million expires in 2011, $172 million
expires in 2013, and $390 million expires in 2014.
Financial Services Sector
Debt Repurchases
From time to time and based on market conditions, our Financial Services sector may repurchase some of its
outstanding debt. If our Financial Services sector has excess liquidity, and it is an economically favorable use of its
available cash (i.e., overall yield on the debt repurchased exceeds the return on investment alternatives), it may
repurchase debt at a price lower or higher than its carrying value, resulting in a gain or loss on extinguishment.
2010 Debt Repurchases. Through private market transactions, our Financial Services sector repurchased and called
an aggregate of $5.6 billion principal amount (including $683 million maturing in 2010) of its unsecured debt and asset-
backed notes. As a result, our Financial Services sector recorded a pre-tax loss of $139 million, net of unamortized
premiums and discounts, in Financial Services other income/(loss), net in 2010.
2009 Debt Repurchases. Through private market transactions, our Financial Services sector repurchased and called
an aggregate of $3.9 billion principal amount (including $1.6 billion maturing in 2009) of its unsecured debt and asset-
backed notes. As a result, our Financial Services sector recorded a pre-tax gain of $67 million ($51 million related to Ford
Holdings and $16 million related to Ford Credit), net of unamortized premiums and discounts, in
Financial Services other income/(loss), net in 2009.
Asset-Backed Debt
Our Financial Services sector transfers finance receivables and net investments in operating leases in structured
transactions to fund operations and to maintain liquidity and the transactions are recorded as secured borrowings. The
majority of our Financial Services sector's transactions are secured borrowings and the associated assets are not
derecognized and continue to be reported on our financial statements.
The finance receivables and net investment in operating leases that have been included in structured transactions are
only available for payment of the debt and other obligations issued or arising in the structured transactions. Cash and
cash equivalents balances related to structured transactions are used only to support the structured transactions. Our
Financial Services sector holds the right to the excess cash flows not needed to pay the debt and other obligations issued
or arising in each of the structured transactions. The debt has been issued either directly by our Financial Services sector
or by consolidated entities.