Capital Markets

Three More Banks Issue FDIC-Backed Debt

Wells Fargo, Suntrust, and HSBC line up with note offerings.
Stephen TaubDecember 10, 2008

Wells Fargo, Suntrust, and HSBC USA all joined the rush to issue debt backed by the federal government.

Wells Fargo issued $6 billion in FDIC-guaranteed notes under the Temporary Liquidity Guarantee Program (TLGP). In its regulatory filing, the banking giant said it had issued $3 billion in floating rate notes due Dec. 9, 2011, and $3 billion in 3 percent notes due Dec. 9, 2011,

Suntrust Bank, the Suntrust Banks Inc. unit, meanwhile, sold $2.75 billion in two-part FDIC-guaranteed notes, according to Reuters. Morgan Stanley, Suntrust Robinson Humphrey, and UBS Securities were the joint bookrunning managers for the sale. Suntrust sold $750 million in two-year notes, priced at 65 basis points over the three-month Libor rate. It also sold $2 billion in three-year notes priced to yield 3.11 percent, or 197.7 basis points over comparable Treasuries. The paper was rated Aaa by Moody’s and Triple-A by S&P.

Also on Tuesday, HSBC USA Inc., a unit of HSBC Holdings Plc, sold $2 billion of 3.5-year FDIC-guaranteed notes under the TLGP, Reuters reported. The paper was priced to yield 3.145 percent, 203.1 basis points over comparable Treasuries, and the notes were rated Aaa by Moody’s and Triple-A by Standard & Poor’s. HSBC Securities was the sole bookrunning manager for the sale. Banc of America Securities, Citigroup Global Markets, RBC Capital Markets, RBS Greenwich Capital, UBS Securities and Scotia Capital were the joint leads on the sale, according to Reuters.

Reuters also reported that American Express Co.’s bank subsidiaries could issue up to $13.3 billion of debt under the government-backed program, which is $4.4 billion more than they originally thought they were eligible to issue. On Monday, American Express trotted out a $5.25-billion, three-part debt sale backed by the government.