Ford Motor $2 Billion Convertible Seen Pricing With 4%-4.5% Coupon-Sources

Ford Motor Co. (F) is expected to price $2 billion of seven-year convertible bonds later Tuesday, according to two people familiar with the matter.

If there is sufficient demand for the issue, the company will upsize the deal to $2.3 billion, these people said. The bonds are expected to price with a coupon of 4% to 4.5%, and a conversion premium of 22.5% to 27.5%, these people said.

Barclays Capital, BofA Merrill Lynch, Citigroup (C), Deutsche Bank Securities, Goldman Sachs (GS), JPMorgan (JPM), Morgan Stanley (MS) and RBS (RBS) are acting as managers of the senior convertible notes offering

In a statement announcing the convertible sale Monday, Ford also said it is looking to extend the maturity of its $10.7 billion revolving-credit facility to 2013 from 2011.

Ford has already secured lender agreements to delay about $6 billion. In addition, the company plans to sell off some of its shares to raise another $1 billion.

Ford is the only one of the Big Three auto makers that has dodged a Chapter 11 filing.

The capital raising comes after Ford failed to win more cost-cutting concessions from the United Auto Workers. Rank-and-file members soundly defeated the concessions demand after workers objected to the modifications due to Ford's brightening financial outlook.

-By Kate Haywood, Dow Jones Newswires; 212-416-2218; kate.haywood@dowjones.com

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