Ford Motor Credit Company – New 3 Year SGD Issue at 3.80% Area
Finally, the SGD primary credit market gets going again after the long hiatus, thanks to the market turmoil calming down in the past couple of weeks. What are the terms of the new deal?
ISSUER: Ford Motor Credit Company LLC
ISSUER RATINGS: Baa2/BBB-/BBB- (Stable/Positive/Positive)
EXPECTED ISSUE RATINGS: Baa2/BBB-/BBB-
NOTES DESCRIPTION: Senior Unsecured Notes
DOCUMENTATION: SEC Registered Global Notes
MATURITY: 3-year Fixed
SIZE: SGD benchmark
INITIAL PRICE GUIDANCE: 3.80% Area (+/- 10 bps)
PAYMENT: Semi-annual, Actual/365 (fixed)
SETTLEMENT: T+6 (11 March 2016) (Singapore)
MATURITY DATE: 11 March 2019
MINIMUM DENOMS: SGD 250k x 100k
GOVERNING LAW: NY Law
LISTING: NYSE
CLEARING: Euroclear and/or Clearstream
BOOKRUNNERS: DBS Bank Ltd. / Deutsche Bank (B&D)
USE OF PROCEEDS: General Corporate Purposes
EXPECTED TIMING: As early as today
US$ Comps:
Security Moody S&P Fitch B YTM B Spd B ZSpd** Amt Out
F 2.943 19 Baa2 BBB- BBB- 2.96 197 195 1.2MMM
** Z+197 swaps to SGD 3.71%
Assuming that pricing doesn’t tighten significantly, the new SGD issue will trade flattish to the USD 19s (on currency swapped basis) which itself was only recently issued in January.
Cheap? Optically, 3.80% for 3 year risk may not be the most eye-catching yield among the SGD investor base. For those of us who remember that Ford 5 year CDS traded close to 3000 (yes three thousand) during the 2009 crisis, buying a Ford bond now at LIBOR+200 seems almost unreal. But for those scarred by the experience of getting stuck with O&G bonds which have gone totally bidless, this would be a welcome alternative despite the sacrifice in yield.
Notwithstanding the rebate dangled in front of PB RMs which means there will be at least some participation from individual investors, this bond should be right up the alley of the real money institutional crowd. Rated triple-B paper paying close to 4% for 3 years? They’ll take it down whole day long. After all, if Ford has been around for the last 113 years, would you bet against it not being around in the next 3?
P.S. Last book update was in excess of S$300mm.