The Business Times

Ford taps green bond market to fund EV development

Published Tue, Aug 16, 2022 · 11:55 PM

FORD Motor is taking advantage of a credit-market rally to sell green bonds.

The vehicle maker is issuing a 10-year unsecured green bond with early pricing discussions suggesting a yield of about 6.4 per cent, according to a person familiar with the matter. That compares to an average yield of 5.97 per cent for debt in the BB tier.

Ford will use the proceeds to help finance new existing green projects, the person said. Ford expects to allocate the net proceeds from this offering exclusively to Clean Transportation projects and specifically to the design, development and manufacture of its battery electric vehicle portfolio.

The company expects to fully allocate the net proceeds of this offering by the end of 2023, said the person.

This is the first junk-rated green sale since June 1st and Ford’s first green issuance since its debut green bond last year, according to data compiled by Bloomberg. The deal is being led by Barclays.

There has been somewhat of a revival in junk-bond markets this week as a market-rally pushes yields lower, drawing issuers off the sidelines to sell debt. BLOOMBERG

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