Ford sells $2.5 billion senior convertible notes

NEW YORK, Nov 4 (Reuters) - Ford Motor Co (F.N: Quote, Profile, Research) late on Tuesday priced $2.5 billion in senior convertible notes, $500 million more than originally planned, part of a move to bolster capital, the company said.

The sale came in the wake of two rating upgrades to Ford's debt after the automaker surprised Wall Street on Monday with a third-quarter profit and strong gains in market share.

The convertible notes due Nov 15, 2016 were priced with a coupon of 4.25 percent and an initial conversion price of about $9.30 per share.

Barclays Capital, Bank of America Merrill Lynch, Citigroup, Deutsche Bank Securities, Goldman Sachs, JP Morgan, Morgan Stanley and RBS were joint book-running managers for the sale.

Ford has granted underwriters the option to buy $375 million in additional notes.

The sale was one of several actions announced by the automaker this week to shore up its balance sheet and improve liquidity. Ford is also seeking to extend the maturity of a revolving credit line to 2013 from 2011 and sell up to $1 billion of common shares.

"Ford has developed a knack for approaching the capital markets at exactly the right time with the right deal," Gimme Credit analyst Shelly Lombard said in a research note on Tuesday. The announcement of its balance sheet restructuring was sandwiched between strong third quarter results on Monday and news on Tuesday of a climb in October auto sales, she noted.

"Ford's recent operating performance and balance sheet restructurings have improved its cash burn, set the stage for future capital markets transactions and greatly improved the company's near-term outlook," she said.

Moody's Investors Service on Monday raised Ford's rating by one notch to B3, the sixth-highest junk rating, from Caa1, while Standard & Poor's on Tuesday raised it to B-minus, its sixth-highest junk grade, from CCC-plus. Fitch changed its outlook on Ford to positive from stable, signaling an upgrade is more likely. (Reporting by Dena Aubin; Editing by James Dalgleish)