Ford Motor (F) announced Wednesday that it had reduced its debt by $1.9 billion after note-holders converted debt into 274 million shares of common stock.

The automaker, which will also pay $534 million in cash premiums to the debt holders, will take a $960 million charge in the fourth quarter because of the conversion, Ford said in a statement. Ford's annual interest expenses will be reduced by $180 million because of the lower debt.

On Oct. 26, Ford offered note-holders of debt due in 2016 and 2036 both cash and the chance to convert their debt to stock. That same day, Ford announced that its third-quarter profit surged 69% to $1.69 billion as the company cut production, administrative and interest expenses. Revenue fell 4.3% to $29 billion, though year-earlier results included Volvo, which Ford sold earlier this year to China-based Geely for $1.5 billion.

As of Oct. 26, the 274 million shares were worth about $3.9 billion. The company said Wednesday that the additional shares have already been factored into Ford's earnings-per-share calculations.

Ford shares rose 1.3% to $15.91 near the end of trading Wednesday afternoon. The stock is up 59% this year.