Extended Time for Ford to Repay Revolving Credit Line image

Ford and a group of banks have reached the agreement to amend and extend the deadline on $9 billion of revolving credit.

The automaker’s lenders have committed to extend the $9 billion facility which was due to mature on November 30th, 2013, until November 30th, 2015. Other lenders who did not agree to extend the maturity date did offer to commit another $300 million under their current agreement with Ford.

An investment grade credit offers a company the possibility to borrow money at lower interest and often eases the relationship with the lenders. Ford lost its investment grade rating after borrowing more than $23 billion in 2006 to weather the industry’s worst downturn in decades.

“It gives us two more years of committed liquidity,” Schloss said about the latest credit arrangement. “To a large extent, it shows the confidence the bank group has in our ability to execute on what we said we would do.”

At the end of 2011, Ford’s automotive debt was $13.1 billion, slightly up from $12.7 billion in September 30th, 2011, as the company tapped an additional $300 billion in low-interest loans from the U.S. Department of Energy to fund future improvements in fuel efficiency.