Investors Buy GM, Sell Ford

Investors in General Motors Corp. and Ford Motor Co. paper were said to be hedging against a downturn in Ford Motor bonds by selling Ford notes and buying GM paper.

  • 30 Jun 2006
Email a colleague
Request a PDF

Investors in General Motors Corp. and Ford Motor Co. paper were said to be hedging against a downturn in Ford Motor bonds by selling Ford notes and buying GM paper. A dealer said investors see more upside for GM bonds compared to Ford notes. He said GM's agreement to buy out 35,000 of its workers, who have agreed to accept early retirement packages, and the pressure on the company to agree on a deal with the United Auto Workers, has caused investors to view the company's debt positively. Investors view Ford paper as having less upside.

Last week, Standard & Poor's lowered Ford Motor Co.'s corporate credit rating to B+ from BB- reflecting the agency's view that 2006 will be a more difficult year for Ford than previously anticipated. The downgrade had little impact on its bonds, however. Ford Motor's 7.45% '31 bonds were off a quarter of a point to 70, while GM's '33 bonds increased a quarter of a point to 75.

"We remain committed to a turnaround plan that we announced in January, which addresses the challenges facing our North American operations. We have a goal to return the auto operations to profitability no later than 2008," said a Ford spokeswoman. She declined to comment on investors selling the company's debt.

  • 30 Jun 2006

GlobalCapital European securitization league table

Rank Lead Manager/Arranger Total Volume $m No. of Deals Share % by Volume
1 BNP Paribas 15,256 32 17.31
2 Bank of America Merrill Lynch (BAML) 9,637 29 10.93
3 Citi 8,264 22 9.37
4 Lloyds Bank 7,329 24 8.31
5 JP Morgan 6,580 10 7.46

Bookrunners of Global Structured Finance

Rank Lead Manager Amount $m No of issues Share %
  • Last updated
  • Today
1 Citi 129,591.43 378 11.20%
2 Bank of America Merrill Lynch 103,666.05 302 8.96%
3 JPMorgan 101,741.96 296 8.79%
4 Wells Fargo Securities 91,373.90 263 7.89%
5 Credit Suisse 76,186.18 204 6.58%