(RTTNews) - Automaker Ford Motor Co. (F: News ), the only major U.S. automaker to avoid bankruptcy, said Tuesday that it has priced its offering of $2.5 billion of senior convertible notes due November 15, 2016. The amount represents an increase from the $2 billion senior convertible note offering previously announced by the company.

On Monday, Ford had said it plans to raise about $3 billion in additional capital through a debt offering and an equity distribution plan as part of actions to improve its balance sheet and enhance automotive liquidity. The company said it plans to offer about $2 billion in aggregate principal amount of senior convertible notes due in 2016 that are convertible by the holder and payable at Ford's option in common stock, cash or a combination thereof.

According to Ford, the notes will be unsecured senior obligations for the company and will bear interest at a fixed rate of 4.25% per year.

The initial conversion rate is 107.5269 shares of Ford common stock per $1,000 principal amount of notes, which is equivalent to an initial conversion price of approximately $9.30 per share. The initial conversion price represents a premium of 25% over the stock's closing price of $7.44 on the New York Stock Exchange on Tuesday.

Ford said it expects to use the net proceeds from the senior convertible notes offering for general corporate purposes.

The company has granted the underwriters an option to purchase an additional $375 million in aggregate principal amount of notes. Earlier, Ford had said it plans to grant the underwriters an option to purchase an additional $300 million of senior convertible notes. The sale of the notes to the underwriters is expected to settle on November 9.
Barclays Capital, BofA Merrill Lynch, Citi, Deutsche Bank Securities, Goldman Sachs & Co., J.P. Morgan, Morgan Stanley and RBS are acting as joint book-running managers of the notes offering. BNP Paribas and HSBC also will be included in the underwriting syndicate for the offering.

Lewis Booth, executive vice president and chief financial officer of Ford said, "This was a successful transaction and the results exceeded our expectations. This transaction directly supports a key pillar of our One Ford strategy -- finance the plan and improve our balance sheet."

On Monday, Ford also said it plans to sell up to $1 billion worth of its shares under an equity distribution agreement with certain broker/dealers. Such sales are not expected to begin until December and are expected to be made over a several-month period.

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