Ford breaks green bond record with debut sale of $ 2.5 billion

Ford Motor has sold a total of US $ 2.5 billion in green bonds whose income is destined to benefit the environment. These become the automaker’s first documents in its transition to electric vehicle manufacturing and the largest such offering by an American corporation.

The company markets green bonds whose maturity is scheduled for a 10-year term, a company spokesperson told Bloomberg. Safety can yield 3.25%, after the first price discussions in the area of ​​3.625%, and the net proceeds “will be used exclusively for clean transportation projects and for the design, development and manufacture of its vehicle portfolio. electric with battery, “said the source.

A week ago, Ford said it plans to sell at least $ 1 billion in green bonds, as part of a broader plan to cut its borrowing costs by more than half by buying back $ 5 billion of junk-rated debt and trying to get back on track. investment grade credit.

“This substantially reduces the cost of our debt,” said John Lawler, chief financial officer, in an interview last week when the company revealed its buyback plans. “It gives us additional financial flexibility, not only from a lower interest expense standpoint, but also strengthens the balance sheet, which is good as we work to get back to investment grade.”

Global sales of green bonds They are at more than $ 447 billion so far this year, a record high and nearly double the $ 234 billion raised in all of 2020. The Ford sale is the largest green bond ever offered by a US corporation, according to data compiled by Bloomberg.

Ford aims to become carbon neutral by 2050 and a significant portion of the funds raised through its sustainable financing strategy will go towards expanding electric vehicle technology and charging infrastructure, and improving the user experience. .

With information from Bloomberg.