American carmaker Ford Motor Co. announced on Wednesday that it will be undergoing a restructuring that involves separating its electric vehicle (EV) business from its internal combustion engine (ICE) business. CEO Jim Farley said, “We are going all in, creating separate but complementary businesses that give us startup speed and unbridled innovation.” In an analyst call, Ford said that it plans to spend $50bn on its EV business through 2026, up from its earlier guidance of $30bn between 2021-2025. The company announced a higher production target of 2mn EVs annually by 2026, a big jump from the 600,000 EVs it was planning to produce in 2024. Ford also boosted its guidance for profitability, targeting an EBITDA margin of 10% by 2026 from 8% expected this year. Bloomberg Intelligence credit analyst Joel Levington said, “We assume that a potential separation wouldn’t happen until after 2026, making longer-dated issues at Ford Motor the most exposed. But Ford could consider a variety of mechanisms, including another debt tender or raising debt at the new company, as a tool eliminate longer-term debt.”

Ford’s 3.25% 2032s traded steady at 94.58 to yield 3.91%.

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