Bloomberg News

Fiat Gets $2.2 Billion After Greek Vote in 1st Bond Since March

July 05, 2011

July 5 (Bloomberg) -- Fiat SpA is raising 1.5 billion euros ($2.2 billion) in its first bond sale for more than three months as borrowing costs tumbled following Greece’s austerity vote.

Fiat is selling 900 million euros of three-year bonds that will be priced to yield 6.125 percent and 600 million euros of seven-year notes that will yield 7.375 percent, according to a banker involved in the deal. The Turin, Italy-based carmaker is rated Ba1 by Moody’s Investors Service, the highest speculative- grade rating, and one level lower at BB by Standard & Poor’s.

Companies are returning to the bond market after Greek lawmakers approved spending cuts on June 29 that pave the way for the nation to get its second bailout. The extra yield investors demand to hold European junk bonds rather than government debt fell to 557 basis points, from 570 at the end of last month, Bank of America Merrill Lynch’s Euro High Yield Constrained Index shows.

“Following the passage of the Greek austerity bills, Fiat now finds itself well positioned to take advantage of the rebound in investor sentiment,” Brian Studioso, a CreditSights Inc. analyst, wrote in a client note. “Fiat held a roadshow in mid-June, but uncertainties regarding Greece led to Fiat holding off until now.”

High-yield, or junk, debt is rated below Baa3 by Moody’s and BBB- by S&P.

Banco Santander SA, Citigroup Inc., Mediobanca SpA, Royal Bank of Scotland Group Plc, Societe Generale SA and UBS AG are managing the sale, Fiat’s first since it issued 1 billion euros of bonds due 2016 in March.

--With assistance from Ben Martin and John Glover in London. Editors: Paul Armstrong, Cecile Gutscher

To contact the reporter on this story: Katie Linsell in London at

To contact the editor responsible for this story: Paul Armstrong at

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