Ford Motors sold sold $1.5 billion in bonds in its first benchmark issue since the automaker regained investment-grade ratings from Moody’s last month, following an upgrade from Fitch Ratings a month before.
Ford last sold investment-grade bonds in March 2005, according to Dealogic. These bonds are being sold through Ford Motor Credit Corp.
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% while the yield was at 3.008% for a reoffer price of 99.9630.
Moody’s raised its rating on Ford by two levels to Baa3, the lowest level of investment grade, from Ba2, on May 22. The move, which followed Fitch Ratings’ upgrade of Ford from junk status on April 24, enabled Ford 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.
Other companies selling bonds Thursday were American Express Co., General Electric Co, Safeway Inc., and Viacom.
At least $8.3 billion of high-grade bonds were priced Thursday. That brought weekly volume to around $15 billion, easily surpassing the $10 billion forecasts at the start of the week.