Ford Motor Co. is trying something new to bolster operations in China. To help support the company’s strategy in China, Ford has announced it’s selling renminbi (RMB)-denominated bonds for the first time. The issue was aimed at investors in Hong Kong, Singapore and elsewhere outside the United States, with total proceeds of $158 million.
“We are pleased with this transaction and appreciate the actions taken by regulators in China that have opened the RMB capital markets for global issuers like Ford,” said Neil Schloss, Ford vice president and treasurer. “This offering was an opportunity for Ford to fund business operations in China while expanding our global investor base.”
Ford was late to the Chinese market, especially when compared to key competitors such as General Motors and Volkswagen, which now dominate that booming market. Its challenge is to establish a niche in the market – with the maker putting an emphasis on regions of China just beginning to share the economic boom first seen along the Pacific Coast.
Meanwhile, Ford has succeeded in negotiating a new line of credit in the U.S. on what it says are more favorable terms. Ford went heavily into debt as the recent economic downturn began – a savvy move in hindsight considering what happened to its cash-starved Detroit rivals. But it is now trying to improve its balance sheet without the benefits that GM and Chrysler got through bankruptcy.