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. Last Updated: 07/27/2016

Near-Record $7.5Bln In Bonds Sold by Ford




NEW YORK -- Ford Motor Co. and its financing arm sold a combined $7.5 billion of bonds Wednesday, 50 percent more than expected for the fourth largest U.S. corporate bond sale ever.


Dearborn, Michigan-based Ford, the world's No. 2 automaker, and Ford Motor Credit Co. found substantial demand for the new Global Landmark Securities, or GlobLS.


The deal came amid falling borrowing costs, appetite for bonds from familiar companies and optimism the Federal Reserve won't raise rates much more.


Since May 16, companies have sold more than $110 billion of U.S. investment-grade corporate bonds. This week alone, they have sold more than $12 billion, including a $3 billion sale Wednesday from Chicago-based Bank One Corp.


Ford modeled its GlobLS program after a similar program from home loan financing giant Fannie Mae to create "benchmark" debt, highly liquid securities that investors can trade easily and use to hedge other investments.


Ford Motor Credit sold $2 billion of two-year floating-rate notes yielding 20 basis points (2/10 of a percentage point) more than three-month Libor, or London Interbank Offered Rate, which is now 6.687 percent. Libor, commonly used as a benchmark for pricing corporate debt, is a rate that large creditworthy foreign banks charge each other for big loans.


The unit also sold $4 billion, up from a planned $3 billion, of five-year notes yielding 7.613 percent, or 147.5 basis points (1.475 percentage points) more than similar maturity U.S. Treasuries.


Later, Ford unexpectedly added $1.5 billion of bonds to an issue maturing in July 2031.