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The finance unit of Ford Motor Co. (F), the second-largest U.S. automaker, raised $1 billion in its first sale of benchmark 10-year bonds in more than a year.
The maker of the Mustang and the Expedition sports utility vehicle sold the 4.25 percent debt to yield 260 basis points more than similar-maturity Treasuries, according to data compiled by Bloomberg. The coupon is the company’s lowest on record for similar-maturity debt.
In Ford’s last benchmark sale in July, its second since regaining investment-grade ratings (F), the automaker sold $750 million of 3.5-year bonds, Bloomberg data show. Ford issued 10- year bonds in July 2011, raising $2 billion with 5.875 percent notes. Benchmark offerings are typically at least $500 million.
The new bonds may be rated Baa3, the lowest level of investment grade, by Moody’s Investors Service. BNP Paribas SA, Citigroup Inc., Deutsche Bank AG and Morgan Stanley managed the sale for the Dearborn, Michigan-based company.
Moody’s increased its grade on Ford in May to Baa3, following Fitch Ratings’s April upgrade of the company from junk status, enabling 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. General Motors Co. (GM) is the biggest U.S. automaker.
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