Ford worked with its lenders to include three key performance indicators (KPIs) that focus on environmental, social, and corporate governance (ESG) objectives. The revolver's interest costs and facility fees rise or fall depending on the company's performance relative to these ESG KPIs. Another notable aspect of the amended credit facility is that its pricing is based on the Secured Overnight Financing Rate (SOFR). Ford's revolver was the first to transition away from LIBOR, and by setting the example, the company helped accelerate the market's transition to the new benchmark rate.

Two months later, in November 2021, Ford and its captive finance company, Ford Credit, jointly introduced a sustainable financing framework (SFF) that laid the groundwork for the issuance of green, social, or sustainable bonds. This was the first SFF to be released by an American auto company, as well as the first SFF released jointly by an original equipment manufacturer and its captive finance company. In addition, the framework received the highest rating from Vigeo Eiris, an external ESG ratings firm. Its development was a team effort among functions throughout Ford, including the sustainability and capital spending departments.

See also:

Instant Insights /

A Treasury Group That's Accelerating Investments in Sustainable Transportation

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