Ford (NYSE:F) Slashing Another $3 Billion in Debt

Ford (NYSE:F) announced its going to pay off another $3 billion in debt in the first quarter, as they move toward their goal of winning back its investment grade rating.

Ford Chief Financial Officer Lewis Booth said, "We remain focused on reducing our automotive debt as the core business continues to strengthen. We are pleased with the progress we have made, and we are committed to continuing to improve our balance sheet."

What the company will do is dissolve a trust it established in 2001 where they borrowed about $5 billion for an earlier phase of their restructuring strategy by issuing preferred securities.

They have since reduced that by close to $2 billion redeeming it in preferred stock. There now is $2.98 billion remaining which will be either paid out in common stock or cash, depending on what shareholders choose.

After these steps are taken, Ford said annual interest payments will fall by around $190 million. There will be a $60 million charge taken by the automaker in the first quarter from the action.

Ford closed Thursday at $15.95, losing $0.14, or 0.87 percent.