Ford 2009 Annual Report Download - page 135

Notes to the Financial Statements
Ford Motor Company | 2009 Annual Report 133
NOTE 19. DEBT AND COMMITMENTS (Continued)
We also received an additional $10 million under the revolving credit facility in the third quarter of 2009 for amounts
previously committed but not yet received.
On November 24, 2009, we entered into the Fourth Amendment to the Credit Agreement. Prior to the Fourth
Amendment, revolving lenders held commitments totaling $10.7 billion that matured on December 15, 2011, of which
$10.2 billion was drawn. As a result of the Fourth Amendment, revolving lenders have commitments totaling $7.2 billion in
a new revolving facility that matures on November 30, 2013. Those lenders who agreed to extend the maturity of their
revolving commitments had the option to reduce their commitments by up to 25%, and receive a 1 percentage point
increase in interest rate margins, an increase in quarterly fees, and payment of an upfront fee.
Pursuant to these arrangements, on December 3, 2009, $2.3 billion of the existing secured revolver was repaid to
effect the commitment reductions elected by extending lenders, while other extending lenders increased their revolving
loan commitments by an aggregate of $400 million, resulting in a net cash repayment of $1.9 billion. Extending lenders
also converted $724 million of the previously-existing revolving facility into a new term loan. Lenders with revolving
commitments totaling $886 million, of which $838 million is drawn, elected not to extend those commitments which will
mature on the original maturity date of December 15, 2011.
At December 31, 2009, $7.5 billion of the $8.1 billion combined revolving facilities has been drawn. In addition,
$418 million was utilized in the form of Letters of Credit, leaving $154 million available to be drawn.
2009 Secured Term Loan Actions. On March 27, 2009, Ford Credit purchased from term loan lenders under the Credit
Agreement $2.2 billion principal amount of the secured term loan for an aggregate cost of $1.1 billion (including
transaction costs). Consistent with previously-announced plans to return capital from Ford Credit to us, Ford Credit
distributed the repurchased secured term loan to its immediate parent, Ford Holdings, whereupon the debt was forgiven.
As a result of this transaction, we recorded a pre-tax gain of $1.1 billion in the first quarter of 2009.
In the third quarter of 2009, Ford Leasing purchased from a term loan lender under the Credit Agreement $45 million
principal amount of the secured term loan for an aggregate cost of $37 million. Ford Holdings elected to receive the
$37 million from Ford Leasing as a dividend, whereupon the debt was immediately forgiven. As a result of this
transaction, we recorded a pre-tax gain of $8 million.
On December 3, 2009, as described above, $724 million of our secured revolving loan was converted into an additional
secured term loan that matures on December 15, 2013. The new term loan has the same pricing, maturity, and other
terms as the existing secured term loan, but is not subject to mandatory prepayments (as defined in the Credit
Agreement) as is the existing term loan.
Notes Due to UAW VEBA Trust
Pursuant to the Amended Settlement Agreement as described in Note 18, at December 31, 2009 we had outstanding
$7 billion in amortizing notes due to the UAW VEBA Trust made up of New Note A and New Note B. New Note A was
recorded at a fair value of $3.1 billion ($4.7 billion par value net of $1.6 billion unamortized discount) using an effective
yield of 9.2%. New Note B was recorded at a fair value of $3.9 billion ($5.9 billion par value net of $2 billion unamortized
discount) using an effective yield of 9.9%. The New Notes mature June 30, 2022, and allow for prepayments that, if paid,
are due with the annual scheduled principal payment dates. The New Notes are secured on a second lien basis, limited
to the lesser of an aggregate $3 billion or the outstanding principal amount of obligations thereunder, with collateral
securing our obligations under the Credit Agreement.
Under New Note B, we have the option, subject to certain conditions, of making each payment in cash, Ford Common
Stock, or a combination of cash and Ford Common Stock. Any Ford Common Stock to be delivered in satisfaction of
such payment obligation is to be valued based on its volume-weighted average price per share for the 30 trading-day
period ending on the second business day prior to the relevant payment date.