Buoyed by a push to investment-grade status by Moody's last month, Ford Motor Credit on Thursday took full advantage of positive sentiment in the US investment grade market, raising a healthy +ACQ-1.5 billion from a five-year trade.
The Baa3/BB rated issuer, the financing arm of the second-biggest US automaker Ford Motor Company, has been a crowd favourite this year. That's partly because of widespread expectations that it would be rescued from a seven-year spell in junk status by upgrades from the international rating agencies.
Fitch was the first to upgrade the credit in April.
In May, the company reached a new milestone when it pierced the 3.00+ACU- coupon level for the first time on a +ACQ-1.25 billion three-year issue. The offering priced with a 2.75+ACU- coupon to yield 2.75+ACU- or 237.8 basis points (bp) over comparable Treasuries.
Moody's followed with an upgrade last month and Ford returned to the market on Thursday.
Any concerns that a Ford bid was already priced in were dispelled when the bond issue found a strong investor response, allowing the issuer to size it at +ACQ-1.5 billion.
The bonds were offered with initial price thoughts of 262.5bp over Treasuries which later tightened to price guidance of 240bp area.
In the end, the deal priced at a yield spread of 230bp, showing the bid for Ford remains solid. The coupon was set at 3+ACU- while the yield was at 3.008+ACU- for a reoffer price of 99.9630. Bank of America Merrill Lynch, Credit Suisse, HSBC, JP Morgan and RBC were the bookrunners.
Comments
Comments are closed.