The second-largest U.S. automaker issued 2.5 percent notes maturing January 2016 to yield 230 basis points more than similar-maturity Treasuries, according to a person familiar with the transaction. The debt is expected to be rated Baa3, the lowest level of investment grade, by Moody’s Investors Service, said the person, who asked not to be identified because the terms are private.
Ford issued $1.5 billion of 3 percent, five-year securities last month in its first benchmark sale after being upgraded to Baa3 by Moody’s on May 22, according to data compiled by Bloomberg. The move, which followed Fitch Ratings’s elevation of Ford from junk status on April 24, enabled the automaker to regain control of its logo and other assets pledged as collateral to obtain a $23.4 billion loan to keep the business going in 2006.
The maker of the Mustang and Expedition last issued benchmark three-year debt in May, selling $1.25 billion of 2.75 percent notes at 238 basis points more than benchmarks, Bloomberg data show. The bonds, which are rated Baa3 by Moody’s, traded at 101.1 cents on the dollar to yield 2.35 percent yesterday, according to Trace, the bond-price reporting system of the Financial Industry Regulatory Authority.
Barclays Plc, Citigroup Inc., Goldman Sachs Group Inc., Morgan Stanley and Royal Bank of Canada managed today’s sale for the Dearborn, Michigan-based company, the person said. Ford Motor Credit Co., its financing unit, issued the debt and proceeds will be used for general corporate purposes.
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