General Motors Financial to price benchmark split-rated dollar notes in Wednesday drive-by

By Paul A. Harris

Portland, Ore., Jan. 7 – General Motors Financial Co., Inc. plans to price a benchmark multi-tranche offering of senior notes (expected ratings Ba1/BBB-/BB+) on Wednesday, according to market sources.

The deal, which will be priced on the investment-grade desk, is coming in tranches of five-year and 10-year notes; the long tranche will come as fixed-rate paper; however, the five-year notes may come as fixed-rate and/or floating-rate paper.

Although no official size had been announced heading into the New York mid-morning, the company aims to sell an overall total of $1.5 billion to $2 billion of bonds, according to a trader.

Guidance has the possible five-year fixed-rate tranche coming at Treasuries plus 190 basis points, while the 10-year notes are guided at Treasuries plus 225 bps, the trader said. No guidance was heard on the possible five-year floating-rate tranche.

Citigroup Global Markets Inc., Barclays, Credit Agricole CIB, Credit Suisse Securities (USA) LLC and RBS Securities Inc. are the lead bookrunners for the public offering. Co-managers remain to be determined.

The five-year notes will become callable at par one month prior to maturity, and the 10-year notes will become callable at par three months prior to maturity. Otherwise all the notes will be non-callable.

The notes in all tranches will feature a 101% poison put.

The deal is expected to settle on Jan. 12.

The Fort Worth-based finance subsidiary of General Motors Co. plans to use the proceeds for general corporate purposes.

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