CORRECT (7/28): Ford's Bond Now $1.387 Billion, Priced Late Tuesday

(An article,"Ford's Bond Now $1.387B, Priced Late Tuesday," published Wednesday at 8:52 a.m. EDT, and an update to the story, published Wednesday at 11:12 a.m. EDT, misstated the amount of the largest tranche of Ford's bond offering. A corrected version follows:)

 
   By Anusha Shrivastava 
   Of DOW JONES NEWSWIRES 
 

NEW YORK -(Dow Jones)- Ford Motor Credit Co. late Tuesday priced its bond backed by auto loans, according to a person familiar with the matter.

The bond was increased in size to $1.387 billion from an original $1.082 billion.

The bond was sold just days after Ford urged Washington to resolve a regulatory dispute that had threatened to close the $700 billion asset-backed securities market.

The financial arm of Ford Motor Co. (F), which had postponed issuing a deal last week because of uncertainty over the financial markets' regulatory overhaul, offered to sell the bond this week via the public market, according to a person familiar with the matter.

The prime auto loan-backed bond, dubbed FORDO 2010B, is joint-led by Bank of America Merrill Lynch, BNP Paribas SA (BNPQY, BNP.FR), Credit Agricole SA (CRARY, ACA.FR) and Deutsche Bank Securities.

Ford's public deal has seven tranches and is rated by Moody's Investor's Service and Fitch Ratings.

The largest tranche of the deal, worth $473.4 million, sold to yield 0.990%.

A Ford Motor Credit spokeswoman said earlier this week the company had worked directly with the Securities and Exchange Commission to craft a reprieve to a part of the law that makes rating agencies legally liable for their opinions about the risks associated with individual securities and their issuers.

"Ford Motor Credit Co. worked with the SEC to find an approach that temporarily resolves this industry issue," Ford Motor Credit spokeswoman Margaret Mellott wrote in an email to Dow Jones Newswires. "Clearly, the SEC recognizes the importance of the public ABS markets, and we are glad the staff is taking temporary measures to ensure public markets continue to be available by establishing a transitional period through Jan. 24, 2011."

The SEC declined to comment.

The SEC's staff agreed late Thursday to temporarily suspend a rule requiring that deal documents for asset-backed bonds include credit agencies' ratings of the bonds. Agencies have forbidden clients to include their ratings in deal documents, contending that new regulations exposed them to unknown added liability if the issuer defaulted.

The new law regards bond-ratings firms as "experts" and holds them liable for the quality of their ratings; in the past, the firms have said their ratings were opinions protected by the First Amendment. The SEC has said it will allow bond sales to go ahead without credit ratings in bond offering documents for the next six months, a move that ends a stalemate between ratings agencies and issuers.

The SEC has agreed to "provide a no-action letter for Ford Credit and other registered ABS issuers," the spokeswoman wrote.

This means Ford Credit and other registered ABS issuers will be able to tap the public ABS markets during the next six months while policymakers and rating agencies work to resolve this issue.

With the reprieve in effect, Ford offered the bond Monday.

-By Anusha Shrivastava, Dow Jones Newswires; 212-416-2227; anusha.shrivastava@dowjones.com

(END) Dow Jones Newswires

July 29, 2010 08:44 ET (12:44 GMT)

Copyright (c) 2010 Dow Jones & Company, Inc.