Ford pays down debt by $1.8B

Ford continues to cut its debt as it attempts to regain an "investment grade" rating from credit agencies.

Ford Motor Company says that it sliced its debt by $1.8 billion yesterday as part of its rapid debt-reduction initiative.

The automaker says that it made a $1.8 billion payment yesterday and that it still owes about $12.2 billion to creditors. Thanks to strong sales, cuts in its employee ranks and a vastly reduced product portfolio, Ford has cut its debt from nearly $34 billion just two years ago under the stewardship of CEO Alan Mulally.

So far this year, Ford has paid down more than $5 billion in debt and it hopes to trim another $2 billion by the middle of the decade.

The automaker's chief financial officer, Lewis Booth, says that it hopes its reduced interest payments will help vault the automaker back to the "investment grade" rating it lost in 2005 as it narrowly avoided bankruptcy.