Dearborn, Michigan, Nov. 19 (Bloomberg) -- Ford Motor Co.                  
sold $3 billion of vehicle loans to Bear, Stearns & Co. after                   
concern about the company's ability to repay debt drove up                      
borrowing costs at the second-biggest automaker.                                
     Ford isn't disclosing terms, spokeswoman Melinda Wilson said.              
Ford manages or holds $204 billion in vehicle loans.                            
     The transaction marks the first time Ford has sold loans                   
outright, and is part of efforts to lower its reliance on the                   
corporate bond market. The company plans to boost sales of debt                 
backed by auto loans, and analysts said today's loan sale gives it              
another alternative for raising money.                                          
     ``You don't want to gorge on one type of food,'' said Kumar                
Neelakantan, who analyzes asset-backed securities at Banc of                    
America. ``It gives Ford more diversified funding sources.''                    
     Investors have shied away from Ford bonds after last year's                
$5.45 billion loss raised concern the company will have trouble                 
repaying about $70 billion in debt coming due by the end of 2005.               
Some of the debt securities that make up Ford's $162 billion in                 
corporate debt last month traded at junk levels before rallying.                
     Treasurer Malcolm Macdonald said in a statement that the sale              
is a ``further source of liquidity'' for Ford Motor Credit Co.,                 
the company's finance arm. Ford Credit held $138 billion in direct              
loans on Sept. 30. The rest are managed for holders of asset-                   
backed bonds and other debt.                                                    
     Last year's loss prompted the company to change management at              
Ford Credit, which had tried to expand into new forms of lending                
and increase loans to people with riskier credit histories. Ford                
Credit is now concentrating on loans for vehicles sold by Ford-                 
owned brands.                                                                   
     Ford's borrowing expenses, the highest in the U.S. automotive              
industry, cost the company almost $600 more for each vehicle sold               
than General Motors Corp., a Lehman Brothers Holdings analyst                   
said. Last month, Ford's 10-year notes traded at a full percentage              
point premium to General Motors bonds, according to Bloomberg                   
data.                                                                           
     Shares of Dearborn, Michigan-based Ford fell 24 cents to                   
$8.56 at 3:35 p.m. in New York Stock Exchange composite trading.                
     Ford sold 7.25 percent bonds maturing 2011 last year at a                  
yield spread to Treasuries of 237.5 basis points. The gap widened               
to more than 600 basis points in October, and has since contracted              
to about 400 basis points. One basis point equals 1/100 of a                    
percentage point.                                                               
     The automaker is selling the loans to Bears Stearns Asset                  
Backed Funding Inc. Ford Credit will continue to service the                    
contracts for a fee, spokeswoman Wilson said.                                   
                                                                                
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