Large companies are often looking to borrow funds when it’s favorable to the business, as we’ve seen time and time again. Cheap debt is a great way to help keep investments flowing, after all, as well as continuing to innovate in a competitive market. This is especially true at the beginning of any given calendar year – in fact, almost exactly one year ago, Ford Credit purchased a considerable chunk of corporate bonds amid what were some of the highest yields in decades at the time, and it was one of around a dozen companies that did so, kicking off the new year by raising a collective $26.5 billion via corporate bond purchases. Now, it seems as if Ford Motor Company is looking to do the same sort of thing once again as we kick off 2025.
According to Bloomberg, Ford is one of several companies – including its cross-town rival, General Motors – that are eyeing the investment-grade primary debt market in what could prove to be a busy first month of the year for underwriters. Ford Credit is said to be specifically looking at a two-part bond deal for general corporate use, seemingly looking to get a jump start on others. In fact, a record $190 billion in bonds were dished out in January 2024, but experts believe that this year could see that total come in somewhere between $175 billion and $200 billion.
“Strength in the banking sector, tight spreads and maturities of $100 billion could be key drivers, but the primary market could face headwinds if debt-ceiling disagreements return,” Bloomberg Intelligence’s Sam Geier and Noel Hebert wrote in a note.
According to MarketWatch, Ford Credit intends to issue a five-year and a 10-year bond in the U.S. dollar market, with those funds going toward “general corporate purposes.” “The company typically issues early in the year to refinance upcoming debt maturities,” said CreditSights analysts Todd Duvick and Will Lee.
No Comments yet