Ford Motor Co Renews $15.5 Billion in Revolving Credit Lines, Aligning Them With its Updated Sustainability Goals
A day after announcing a $11.4 billion investment in two new electric vehicles mega campuses in Tennessee and Kentucky to build its future EVs, batteries and other components, U.S. automaker Ford Motor Co announced its renewing $15.5 billion in credit lines, in order to better align them with the company's new sustainability goals.
Ford's $15.5 billion in revolving credit lines will now include key metrics that further align the company's financing actions with its commitment to operate a safe, sustainable and successful business.
The new arrangement includes extensions of three revolving credit lines; a five-year, $10.1 billion facility maturing in Sept 2026, along with a three-year, $3.4 billion facility and a three-year, $2.0 billion supplemental facility, both maturing in Sept 2024.
The three renewals are distinguished by their inclusion of measures demonstrating how Ford's environmental, social and corporate governance (ESG) initiatives are integrated throughout its business, including how the company is leading its electric-vehicle revolution.
"Ford people recognize that what's good for the planet is good for business," said company treasurer Dave Webb. "We're all accountable for creating a constantly safer and cleaner organization that sets an example for sustainability."
The sustainability performance metrics reflect Ford's actions toward fighting climate change, including the reduction of greenhouse emissions from its manufacturing facilities as part of Ford's commitment to the EU's Paris Climate Agreement to address global warming.
The other metric includes increasing the percentage of renewable electricity consumed in Ford's global manufacturing plants towards the automaker's goal of 100% by 2035, as well as lowering C02 tailpipe emissions from its passenger vehicles sold in Europe.
Reducing CO2 tailpipe emissions in Europe consistent with both the European Commission's comprehensive "Scope 3" Greenhouse Gas Protocol standard. Scope 3 emissions are those which are a result of activities from assets not owned or controlled by Ford, but the company indirectly impacts in its value chain. Performance against defined annual targets for ESG performance could result in lower or higher costs of the facilities, according to Ford.
Beginning with Ford's credit line extensions, the automaker is leading the corporate loan market's transition away from the LIBOR (London Interbank Offered Rate) by pricing its revolving credit facilities directly off of the daily Secured Overnight Financing Rate (SOFR) for corporate borrowing.
To develop its new sustainability-linked facilities, Ford partnered with Paris-based Crédit Agricole Corporate and Investment Bank. The facilities are supported by a global lender group composed of leading 60 banks, led by JPMorgan Chase, which served as the administrative agent and lead bookrunner.
Ford is investing $30+ billion in electric vehicles through 2025 to support the company's longer term goal of creating a sustainable American manufacturing ecosystem while move towards achieving carbon neutrality.
By 2030, Ford expects that 40% to 50% of its global vehicle volume will be fully electric.
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