- Ford Motor Co is reducing its debt by more than $4bn - primarily by retiring debt owed to the UAW Retiree Medical Benefits Trust ahead of schedule.

The company says it is taking the action to strengthen its balance sheet as it gains momentum on its One Ford plan and remains on track to deliver solid profits and positive Automotive operating-related cash flow this year.

Ford is making scheduled payments in cash totalling about $860m on Notes A and B held by the UAW Retiree Medical Benefits Trust - including about $250m due under Note A, and $610 million due under Note B.

Ford had the option to pay Note B with cash or Ford stock but agreed to pay with cash.

Ford and its subsidiary, Ford Motor Credit Company, are also paying a combined $2.9bn to retire the remaining obligation on Note A at an agreed upon discount of 2%.

And Ford is making a $255m cash payment to bring current previously deferred quarterly distributions on the 6.50% cumulative trust preferred securities of Ford Motor Company Capital Trust II.

Ford has reduced its debt by more than $7bn in the second quarter which will save it more than $470m in annual interest expense.

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