Ford Motor Credit prices $1 billion; MidAmerican Energy, Citi tap market; credit spreads firm

By Cristal Cody

Tupelo, Miss., Oct. 5 – New investment-grade supply on Monday included a $1 billion fixed-rate notes deal from Ford Motor Credit Co. LLC, a floating-rate notes deal from Citigroup Inc. and a two-part sale of first mortgage bonds from MidAmerican Energy Co.

Ford Motor Credit sold $1 billion of three-year fixed-rate notes and opted to forgo a planned two-part sale of floating-rate notes.

MidAmerican Energy priced a $650 million two-part sale of first mortgage bonds, including a tap of its 3.5% bonds due Oct. 15, 2024.

Citigroup tapped the market with $225 million of floating-rate notes due July 30, 2018.

About $10 billion to $15 billion of high-grade issuance is expected for the week.

Credit spreads tightened about 5 basis points over the day. The Markit CDX North American Investment Grade 25 index firmed 5 bps to close at a spread of 88 bps.

In the secondary market, Ford Motor Credit’s existing paper traded nearly 10 bps tighter.

Bank and financial paper was mostly better during the session.

HSBC Holdings plc’s 4.25% subordinated notes due 2025 headed out 6 bps tighter in secondary trading.

Ford Motor Credit’s $1 billion

Ford Motor Credit (Baa3/BBB-/BBB-) sold $1 billion of 2.551% three-year fixed-rate notes at par on Monday, according to a market source and an FWP fling with the Securities and Exchange Commission.

The notes due Oct. 5, 2018 priced with a spread of 167 bps plus Treasuries.

The company nixed a planned two-part offering of floating-rate notes.

Credit Suisse Securities (USA) LLC, Deutsche Bank Securities Inc., HSBC Securities (USA) Inc., RBC Capital Markets LLC and RBS Securities Inc. were the bookrunners.

Proceeds from the deal will be added to the company’s general funds and will be available for the purchase of receivables and loans and for the retirement of debt.

Ford Motor Credit is the financing arm of Dearborn, Mich.-based Ford Motor Co.

MidAmerican’s mortgage bonds

MidAmerican Energy priced $650 million of first mortgage bonds (A1/A-/A+) in two tranches on Monday, according to a market source.

The company sold $200 million in a reopening of its 3.5% bonds due Oct. 15, 2024 at 103.358 to yield 3.06% and a spread of 100 bps plus Treasuries.

MidAmerican Energy originally sold $300 million of the 3.5% bonds due 2024 on March 31, 2014 at 99.511 to yield 3.556%, or Treasuries plus 83 bps.

In the second tranche, MidAmerican Energy sold $450 million of 4.25% bonds due May 1, 2046 at 99.862 to yield 4.258%. The bonds priced with a spread of 135 bps over Treasuries.

Barclays, Mizuho Securities, U.S. Bancorp Investments Inc., Wells Fargo Securities LLC, BNP Paribas Securities Corp. and Citigroup Global Markets Inc. were the bookrunners.

The Des Moines-based utility company plans to use the proceeds to repay about $426,254,000 of long-term debt due Dec. 31, 2015 and for general corporate purposes.

Citigroup prints floaters

Citigroup (Baa1/A-/A) sold $225 million of floating-rate notes due July 30, 2018 at par to yield Libor plus 88 bps on Monday, according to a 424B2 filing with the SEC.

Citigroup Global Markets Inc. was the bookrunner.

The notes form part of the same series of floating-rate notes issued on July 30. Citigroup originally sold $500 million of the floaters on July 23 at par to yield Libor plus 88 bps. The total outstanding of the series is now $725 million.

Proceeds from the deal will be used for general corporate purposes.

Citigroup is a New York City-based financial services company.

Ford Motor Credit improves

Ford Motor Credit’s 4.134% notes due 2025 were quoted going out at 211 bps bid, better than where the paper traded on Friday at 220 bps bid, a market source said.

The company sold $700 million of the notes (Baa3/BBB-/BBB-) on July 30 at Treasuries plus 187.5 bps.

HSBC firms

HSBC’s 4.25% notes due 2025 traded 6 bps better on Tuesday at 235 bps bid, according to a market source.

HSBC sold $1.5 billion of the notes (A2/A+) on Aug. 10 at a spread of Treasuries plus 212 bps.

The banking and financial services company is based in London.

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