Ford sells green bonds to fund its power conversion

Ford sells green bonds to fund its power conversion

2021 Ford F-150 Limited | Photo: Olivier Delorme

  • The company sells US $ 2.5 billion worth of bonds, the largest offer for a US company

  • These bonds will finance Ford’s power conversion

  • Ford is trying to reduce debt and get quality credit back

Ford is involved in the electrification of its products and to expedite it, the company will sell green bonds.

The $ 2.5 billion offer is the largest ever recorded by a US company.

These bonds mature in 10 years and their yield is expected to be around 3.25%. Profits will be used exclusively to design, improve and manufacture clean energy products and projects.

The move will allow Ford to recoup some of its inventory up to $ 5 million and recover quality debt, which will allow the company to spend less on debt and more on new projects.

Customers and investors are pressuring companies to reduce emissions, and interest in green bonds is higher than ever, with $ 447 billion in global sales so far in 2021, more than double the amount already accumulated in 2020.

Ford has begun to move towards electrification with the introduction of the Mustang Mac-E electric SUV and F-150 Lightning electric pickup, but still needs to release more electric vehicles to achieve its goal.

The goal is to become carbon neutral by 2050, and much of the company’s chances of success lie in the popularity of these green bonds and the financial flexibility they will bring in the coming decades.

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About the Author: Cory Weinberg

Cory Weinberg covers the intersection of tech and cities. That means digging into how startups and big tech companies are trying to reshape real estate, transportation, urban planning, and travel. Previously, he reported on Bay Area housing and commercial real estate for the San Francisco Business Times. He received a "best young journalist" award from the National Association of Real Estate Editors.

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