Ford Motor Credit raised US$2bn in the high-yield market on Wednesday after the auto lender's manufacturing parent company reported plans for a massive expansion in electric vehicle production.
The credit arm of the auto manufacturer, rated Ba2/BB+/BB+, priced a US$1.25bn long three-year at 2.3% and a US$750m long seven-year senior unsecured bond at 2.9%, tightening 5bp from guidance of 2.35% area and 2.95% area, respectively.
The bond deal followed an announcement by Ford Motor Company on Wednesday that it plans to nearly double production capacity of its electric F-150 Lightning vehicles to 150,000 per year to meet customer demand. The company posted its best year for full electric vehicles in 2021, with 12,284 electrified vehicle sales in December 21, up 121% from December 2020. In contrast, overall vehicle sales in December 2021 of 173,740 were down 17% from December 2020 volume.
Pricing was tight to the issuer's outstanding curve, with the credit company's 2.70% 2026 notes issued last August trading at a yield around 2.58%, and its 2.90% 2028 bonds issued last February trading around 2.76% yield, according to MarketAxess.
Active bookrunners were Citi, Deutsche Bank (billing and delivering on the three-year), Goldman Sachs (B&D on the seven-year), Northwestern Mutual, SMBC and Societe Generale.
Updated story: Updates headline, adds pricing information