Bond Market News

Ford Motor Company reported its results with quarterly revenues of $36bn and a net loss of $2.8bn.  Annual losses came at $1.28bn as the company had to shut down factories during the pandemic, while revenues were at $127bn, down 18% from 2019. They reported $4.5bn in operating cash flows, $1.9bn in adjusted free cash flows and year-end cash of ~$31bn with total liquidity of ~$47bn. Importantly, the company mentioned its plans to invest $22bn in EVs and $7bn in AVs through 2025, almost doubling their earlier remark of $11.5bn in EVs through 2022. Ford’s CEO Jim Farley said “2021 is our year of action. We’re executing our plan and we’ll continue to do that so every business in our portfolio has a sustainable future. If not, we will restructure it… “We’re now allocating a combined $29bn in capital and tremendous talent to these two areas, and bringing customers high-volume, connected electric SUVs, commercial vans and pickup trucks.” They did mention that in 2021, the global shortage in semiconductor chips could earnings by $1bn-$2.5bn. Ford’s bonds traded higher – its 4.75% 2043s were up 1.4 to 104.86, yielding 4.4% and their 6.625% 2028s were up 0.8 to 118.36, yielding 3.8%.

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