Ford Motor Credit's Offering Of Debt Gets Warm Reception
Dow Jones Newswires</br></br>Emboldened by the recent turnaround in auto bonds after General Motors Corp.'s smooth transition to speculative-grade ranking, bondholders responded warmly to rival Ford Motor Credit's first foray into the corporate-bond market since Standard & Poor's lowered its credit ratings to junk in May.</br></br>The finance arm of Ford Motor Co. sold an unsecured offering of $1.5 billion, increased from $1 billion. Its three-year notes have a coupon of 6.625% at a price of 99.259, for a yield of 6.902%. That amounted to a yield margin of 3.30 percentage points over comparable Treasurys, in line with expectations. UBS and Lehman Brothers were the lead managers on the bond offering.</br></br>"In light of recent events, investors are increasing their risk appetite," said Brian Ropp, an auto analyst at T. Rowe Price in Baltimore. "This, and the attractive spread concession on Ford Motor Credit's new issue should see this deal do well," Mr. Ropp added. Spreads are the difference in yield between bonds and comparable U.S. Treasurys paid to investors for owning riskier corporate debt.</br></br>The $1.5 billion deal garnered around $4 billion in orders from investors, according to one market participant. The deal was put together partly in response to inquiries by investors about an offering from Ford, people familiar with the situation said.