Capital Markets

Banks, Others Tap Debt Markets in Force

At least five companies step up on Monday, including two banks with federally guaranteed issues.
Stephen TaubDecember 8, 2008

At least five companies tapped the public debt markets on Monday, including two banks with new issues guaranteed by the federal government.

American Express Co. trotted out the largest issue, a $5.25-billion, three-part debt sale that will be backed by the Federal Deposit Insurance Corp., according to Reuters. The sale includes $500 million in two-year floating-rate notes expected to price at about 85 basis points over the one-month London interbank offered rate; $1.25 billion in three-year floating rate notes expected to price at around 98 basis points over one-month Libor; and $3.5 billion in three-year fixed rate debt, expected to yield around 88 basis points over mid-swaps.

Regions Bank, part of Regions Financial, sold $3.5 billion in a four-part debt sale that will be guaranteed by the FDIC.

And in a sale not guaranteed by the government, Shell International Finance B.V., a subsidiary of Royal Dutch Shell Plc, sold $2.75 billion of 30-year senior notes, priced to yield 6.415 percent, 325 basis points over comparable Treasuries. The issue was rated Aa1 by Moody’s and AA-plus by S&P.

General Dynamics Corp. sold $1 billion in five-year notes, priced to yield 5.354 percent, or 365 points over Treasuries. The issue was rated A2 by Moody’s and Single-A by S&P.

And Wisconsin Electric sold $250 million of seven-year senior notes. The A1/A-minus issue was priced to yield 6.261 percent, 425 points over Treasuries.

On Friday, – Harvard College sold $1.5 billion of three-part debt in the private placement market.