Ford hikes borrowing capacity

DETROIT — Ford Motor Co. said Wednesday it will raise its new borrowing capacity to as much as $21.5 billion, up from the $18 billion figure it announced last week.

The increase of up to $3.5 billion was due to “overwhelming support” by lenders, Ford said in a regulatory filing with the Securities and Exchange Commission.

The No. 2 U.S. automaker said last week that it planned to get the financing to help fund its restructuring and to cover anticipated losses in its automotive operations during the next two years.

Ford said it still plans to borrow $18 billion but wants the additional credit options for flexibility as it goes through the massive restructuring plan.

“Our target is still $18 billion, but these contingencies assure us that we have access to additional funding options,” Ford spokesman Oscar Suris said.

The company also told the SEC on Wednesday that it must pledge its investment in Mazda Motor Corp. as collateral for $2 billion of first lien debt capacity that was available before the $18 billion in borrowing was announced. Ford owns about one-third of Mazda.

The additional Mazda collateral is necessary because of the potential for increased borrowing, Suris said.

Shelly Lombard, senior credit analyst at the bond research firm Gimme Credit, said the additional borrowing capacity isn’t necessarily a sign that Ford’s fortunes have worsened. Rather it’s a sign that lenders now are willing to loan Ford money at good rates.

“They’ve decided, and I think it’s a very wise move, you borrow when it’s available,” Lombard said. “I think it’s one of those things that you get while the getting is good. Right now the capital market is good.”

The Dearborn-based company said last week that the $18 billion in financing — secured by its domestic plants and other automotive assets — will help protect against a recession or other unanticipated events.

•Microsoft Corp. said Wednesday that it expects to sell 1 million of its new Zune music players through the first half of 2007. That figure would pale in comparison to Apple Computer Inc.’s market-leading iPod, but Microsoft contends it would be a good start.

“We think that’s actually pretty awesome,” said Bryan Lee, corporate vice president for Microsoft’s entertainment group.

The $250 Zune, whose 30 gigabyte hard drive can hold 7,500 songs, debuted in mid-November to mixed reviews.