Ford pays off $4B of its debt

June 30, 2010 at 4:11 PM
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DEARBORN, Mich., June 30 (UPI) -- U.S. auto giant Ford Motor Co. said Wednesday it would reduce its debt by more than $4 billion including $3.8 billion going to a union healthcare plan.

In the second quarter the company reduced its debt by more than $7 billion, the automaker said in a statement.

Wednesday's payment pays down Notes A and B of debt owed to the United Auto Workers Union Retiree Medical Benefits Trust, including $250 million due on Note A and $610 million due on Note B.

The company noted it had the option of paying Note B with stock but chose to pay all in cash, which gives it a discount.

Ford, along with its financial subsidiary Ford Motor Credit Co., is also paying $2.9 billion to conclude its obligation to Note A, the company said in a statement.

In April, Ford paid off $3 billion on its revolving credit facility, making the second quarter debt reduction about $7 billion.

"We are pleased to make these payments ahead of schedule for the benefit of Ford and our UAW-Ford retirees who count on the Trust for their healthcare benefits," Ford President and Chief Executive Officer Alan Mulally said in a statement.

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