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| Royal Bank of Scotland sells $7 bn of debt |
| Bloomberg / New York Nov 23, 2009, 00:30 IST |
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Royal Bank of Scotland Plc sold $7 billion of debt due in March 2012, according to data compiled by Bloomberg, equaling the largest US corporate sale since May.
The government-backed issue was split between $2 billion of fixed-rate notes that priced to yield 80.5 basis points more than similar-maturity US Treasuries and $5 billion of floating-rate debt that pay a spread of 26 basis points more than the three-month London interbank offered rate, Bloomberg data show. A basis point is 0.01 percentage point.
Proceeds from the sale of the notes, which may receive top ratings from Moody’s Investors Service and Standard & Poor’s, will be used for general corporate purposes, according to a person, who declined to be identified because of lack of authorisation to speak on the record.
The sale was the biggest in the US corporate market since RBS sold $7 billion of three-year government-backed debt in May, according to Bloomberg data. That offering also was split between fixed- and floating-rate notes. The $4.5 billion of fixed-rate notes paid 124.5 basis points more than US benchmarks, and the $2.5 billion floaters paid 70 basis points more than Libor.
Chancellor of the Exchequer Alistair Darling established a guarantee program in response to the credit crunch that allows financial companies to sell bonds with government guarantees.
The UK Treasury agreed earlier this month to inject 25.5 billion pounds ($42.1 billion) of capital into Edinburgh-based Royal Bank of Scotland, increasing its stake to 84.4 percent from 70.3 per cent.
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