Ford Motor on Friday raised $8 billion from corporate debt investors to shore up its cash reserves as the coronavirus outbreak pummeled vehicle sales and production, resulting in an estimated loss of about $2 billion for the first quarter.

The Dearborn, Michigan-based company, which lost its investment-grade status in March, raised new funds with a three-part debt offering, according to a regulatory filing.

Investors said Ford benefited from the US Federal Reserve’s move last week to backstop debt offerings by companies that lost investment-grade credit ratings after the COVID-19 crisis accelerated in the United States, International Financing Review reported on Friday.

“Today’s deal is a good sign of the growing confidence around the improving market backdrop with respect to liquidity as well as more promising views around the economic outlook,” said Dan Mead, head of investment grade syndicate at Bank of America Securities, which was one of the lead banks on the Ford deal.

In an environment where interest rates on cash savings are close to zero, Ford will pay investors interest of between 8.50% and 9.625% on the new debt securities.

There was around $40 billion worth of demand from investors across the three debt packages, according to a person familiar with the matter.

Ford had earlier drawn down over $15 billion from revolving credit lines to ride out the pandemic, which forced the shutdown of its North American and European factories during the past month.

Separately, General Motors disclosed in a regulatory filing that it had entered into a 364-day revolving credit agreement of $1.95 billion. The automaker said it has allocated the credit line for exclusive use by its financial services business. Ford on Friday said it had to put up additional guarantees for earlier loans - not the notes sold Friday - because it has not maintained an investment-grade status. It has suspended its dividend for the quarter.

Stanching the cash drain and restarting profitable operations in Europe and North America will be critical for Ford in the months ahead. The company told investors ahead of Friday’s bond deal that absent new funding and a restart of production, it had cash to last to the end of the third quarter.

Now, Ford has more breathing room financially, and federal and state officials this week said they expect coronavirus lockdowns to begin easing, possibly allowing auto plants to begin building vehicles again early next month.

Still, the company has taken a body blow from the pandemic at a time when it was already wrestling with a difficult restructuring effort begun more than two years ago. Ford’s vehicle sales to dealers fell 21% in the first quarter, compared with a year earlier.

Only Ford’s joint ventures in China, where the pandemic has been receding, are currently producing vehicles, and dealers there have resumed work.

Separately, Ford warned that its production of high-priced versions of pickups and sport utility vehicles could be hurt due to the damage caused by a tornado earlier this week at parts supplier BorgWarner’s South Carolina factory.

BorgWarner’s facility makes transfer cases for some of Ford’s most profitable vehicles, such as four wheel-drive large F-series pickups and large sport utility vehicles.

Ford Motor said on Thursday that its China vehicle sales in the first three months this year fell 34.9% from a year earlier to 88,770 units, as the novel coronavirus epidemic hit demand in the world’s biggest auto market.

The company said, however, all its dealers in China had resumed work and its sales in March had returned to 75% of the same period last year.

In China, Ford makes cars through Jiangling Motors Corp Ltd (JMC), in which it has a stake, and a joint venture with Chongqing Changan Automobile.

Ford has been trying to revive sales in China after its business began slumping in late 2017. Sales sank 26% in 2019, after a 37% drop in 2018. In 2017, its China sales fell 6% from a year earlier.

China’s auto sales dropped 8% in 2019 and are expected to fall more than 5% this year. Overall auto sales slumped 42.4% in the first quarter.

Sales of Ford’s larger US rival, General Motors Co, dropped 43.3% in China in the first quarter.

Ford Motor said on Monday it expects to post a pre-tax loss of about $600 million for the first quarter as the coronavirus outbreak pummeled its sales and shuttered vehicle assembly plants, resulting in a 21% drop in vehicle sales to dealers versus the same quarter in 2019. The news sent Ford’s shares down more than 5% in morning trading.

Agencies