New Issue: ResCap prices $3.5 billion notes including $1 billion high-yield tranche

By Paul A. Harris

St. Louis, April 11 - Residential Capital Corp. (ResCap), the mortgage lending unit of General Motors Acceptance Corp. (GMAC), priced a $3.5 billion corporate bond transaction on Tuesday, according to market sources.

The transaction included a $1 billion issue of three-year senior subordinated floating-rate notes (Ba1/BB+/BB+) which priced at par to yield three-month Libor plus 183 basis points, on the tight end of the three-month Libor plus 185 basis points price talk.

Bear Stearns & Co. and Citigroup were the global lead managers for the subordinated notes, which were issued via Rule 144A for life and Regulation S. Credit Suisse and JP Morgan were the joint bookrunners. The co-managers were Barclays Capital, BNP Paribas, Deutsche Bank Securities, HSBC and Lehman Brothers.

In addition to the high-yield tranche, ResCap priced two tranches of Securities and Exchange Commission-registered investment-grade notes (Baa3/BBB-/BBB).

They included a $750 million issue of three-year senior floating-rate notes that will bear interest at three-month Libor plus 110 basis points, and a $1.75 billion issue of 6½% seven-year senior fixed-rate notes which priced at a 163 basis points spread to Treasuries.

For the investment-grade tranches, Bear Stearns and Citigroup were the global lead managers and Barclays Capital and HSBC were joint bookrunners. The co-managers were Banc of America Securities, Credit Suisse, JP Morgan, The Royal Bank of Scotland and Societe Generale.

Proceeds will be used to repay the remaining subordinated debt which ResCap owes to GMAC.

The transaction was upsized from $3 billion.

Issuer:	Residential Capital Corp.
Amount:	$3.5 billion (increased from $3 billion)
Trade date:	April 11
Settlement date:	April 17
Senior subordinated floating-rate notes (high yield)
Amount:	$1 billion
Maturity:	May 17, 2009
Issue:	Senior subordinated floating-rate notes
Bookrunners:	Bear Stearns & Co., Citigroup (global lead managers), Credit Suisse, JP Morgan (joint bookrunners)
Co-managers:	Barclays Capital, BNP Paribas, Deutsche Bank Securities, HSBC, Lehman Brothers
Coupon:	Three-month Libor plus 183 bps
Price:	Par
Yield:	Three-month Libor plus 183 bps
Call protection:	One year
Ratings:	Moody's: Ba1
	Standard & Poor's: BB+
	Fitch: BB+
Distribution:	Rule 144A for life/Regulation S
Price talk:	Three-month Libor plus 185 bps area
Senior floating-rate notes (investment grade)
Amount:	$750 million
Maturity:	May 17, 2009
Issue:	Senior floating-rate notes
Bookrunners:	Bear Stearns, Citigroup (global lead managers), Barclays Capital, HSBC (joint bookrunners
Co-managers:	Banc of America Securities, Credit Suisse, JP Morgan, The Royal Bank of Scotland, Societe Generale
Coupon:	Three-month Libor plus 110 basis points
Call:	Make-whole call at Treasuries plus 25 basis points
Ratings:	Moody's: Baa3
	Standard & Poor's: BBB-
	Fitch: BBB
Distribution:	SEC registered
Senior fixed-rate notes (investment grade)
Amount:	$1.75 billion
Maturity:	May 17, 2013
Bookrunners:	Bear Stearns, Citigroup (global lead managers), Barclays Capital, HSBC (joint bookrunners
Co-managers:	Banc of America Securities, Credit Suisse, JP Morgan, The Royal Bank of Scotland, Societe Generale
Coupon:	6½%
Price:	99.712
Yield:	6.552%
Spread:	Treasuries plus 163 bps
Ratings:	Moody's: Baa3
	Standard & Poor's: BBB-
	Fitch: BBB
Distribution:	SEC registered

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