Ford Marketing $2.954 Billion Bond Deal, TALF Eligible
March 18 2009 - 1:20PM
Dow Jones News
Ford Motor Credit Co.'s $2.954 billion deal backed by auto
receivables is the second deal announced that is eligible for the
Federal Reserve's program aimed at reviving the consumer lending
market.
On Tuesday, auto maker Nissan (NSANY) said it is selling $1.5
billion of bonds backed by auto receivables.
The bulk of Ford's deal, called FORDO 2009-A, has the top-notch
triple-A rating, so investors can get a loan from the Fed's Term
Asset-Backed Securities Loan Facility, or TALF, to invest in this
bond offering.
RBS, Banc of America Securities, Deutsche Bank, Goldman Sachs
and JP Morgan are the joint leads on the deal.
The Fed's $200 billion program, for which the central bank began
accepting applications Tuesday, is aimed at encouraging issuance in
the market for consumer loan-backed securities. This market dried
up during the financial upheaval that began last fall.
The application deadline for the first round of financing
through TALF is Thursday, with disbursement funds due March 25.
Market participants expect more bond issuance in the coming
weeks.
Price guidance on the Ford deal is circulating, according to a
person familiar with the deal.
The $775 million 0.30-year portion is expected to yield around
50 basis points over a short-term benchmark.
The $608 million 0.99-year portion has guidance in the 200 basis
points area over a short-term futures benchmark.
The $1.08 billion 1.99-year portion has guidance in the 215 to
225 basis points area, and the $491 million 3.31-year tranche is
expected at 350 to 375 basis points over interest rate swaps.
-By Anusha Shrivastava, Dow Jones Newswires; 201-938-2371; anusha.shrivastava@dowjones.com
(Liz Rappaport of The Wall Street Journal contributed to this
report)