DEARBORN, Mich. -- Ford Motor Co. has announced today the successful completion of debt restructuring initiatives that will reduce Ford's Automotive debt by $9.9 billion from $25.8 billion at Dec. 31, 2008, and lower Ford's annual cash interest expense by more than $500 million based on current interest rates.

"By substantially reducing our debt, Ford is taking another step toward creating an exciting, viable enterprise," said Ford President and CEO Alan Mulally. "As with our recent agreements with the UAW, Ford continues to lead the industry in taking the decisive actions necessary to weather the current downturn and deliver long-term profitable growth."

On March 4, Ford and Ford Credit announced the major components of a comprehensive debt restructuring: (1) a conversion offer in which Ford offered to pay a premium in cash to induce the holders of any and all of the $4.88 billion principal amount outstanding of its 4.25 percent Senior Convertible Notes due Dec. 15, 2036 to convert the Convertible Notes into shares of Ford's common stock; (2) a $500 million cash tender offer by Ford Credit for Ford's senior secured term loan debt; and (3) a $1.3 billion cash tender offer by Ford Credit for certain of Ford's unsecured, non-convertible debt securities.

As of the Expiration Date, approximately $4.3 billion principal amount of Convertible Notes were validly tendered and accepted for purchase, according to information provided by Computershare, Inc., the Exchange Agent with respect to the Conversion Offer. This will result in the issuance of an aggregate of approximately 468 million shares of Ford's common stock and the payment of an aggregate of $344 million in cash ($80 in cash per $1,000 principal amount of Convertible Notes converted), plus the applicable accrued and unpaid interest on such Convertible Notes, on the expected settlement date of April 8, 2009. Upon settlement of the Conversion Offer, approximately $579 million aggregate principal amount of Convertible Notes will remain outstanding.

On March 23, Ford Credit announced that the Term Loan Offer, which expired at 5 p.m. on March 19 had been over-subscribed. Based on the tenders received, Ford Credit increased the amount of cash used from $500 million to $1 billion to purchase $2.2 billion principal amount of Ford's Term Loan Debt at a price of 47 percent of par. This transaction was settled on March 27, following which Ford Credit distributed the Term Loan Debt to its immediate parent, Ford Holdings LLC. The distribution of the Term Loan Debt is consistent with Ford Credit's previously announced plans to pay distributions to Ford of about $2 billion through 2010.

Approximately $4.6 billion aggregate principal amount of Term Loan Debt remains outstanding.