NEW YORK, Feb 2 (Reuters) - Ford Motor Co (
F.N) is likely to undergo a bond exchange to reduce its debt burden, though the company is the least likely of the three largest Detroit automakers to file for bankruptcy protection, KDP Investment Advisors said in a report.
"We believe there is little chance that Ford's unsecured notes will be paid back at par and expect the company to announce a distressed debt exchange in the coming months, along with GM, in an effort to reduce its level of unsecured debt as it piles on secured debt," KDP analyst Kip Penniman said in a report issued on Friday.
General Motors Corp (
GM.N) is undertaking a debt-to-equity exchange that the automaker expects will reduce its unsecured U.S. debt to $9 billion from nearly $28 billion.
A reduction in the debt load and concessions from union workers are needed as part of a plan to restructure the company in return for $13.4 billion in government loans.
Ford last week reported a record $14.6 billion full-year loss, but said it would have enough cash to survive the worst downturn in auto sales in decades without a U.S. government bailout. For details, see [ID:nN29300793]
Ford Chief Executive Alan Mulally also said in an analyst conference call that the company was in talks with all its "stakeholders" about improving its balance sheet.
In spite of its debt burden, Ford has a stronger liquidity profile than its main competitors and may be able to withstand the industry slowdown without seeking funds from the government's Troubled Asset Relief Program, or TARP, said KDP's Penniman.
"We project the automaker's cash balances will fall to near minimum levels in 2010, however, we believe Ford stands a chance of managing its liquidity without accessing TARP funds," Penniman said. (Reporting by Karen Brettell; editing by Gary Crosse)
http://www.reuters.com/article/marke...0090202?rpc=44