General Motors Acceptance Corp (GMAC) $1 billion five-year global: Merrill Lynch, JP Morgan
This debut global bond was more than twice oversubscribed and over half the bonds were sold outside the US. GMAC, which is rated A3/A-, was able through the deal to reach a wide number of international institutional investors. Before, its debt was sold mainly to retail investors. The pricing was sensible at 42bp over treasuries, and General Motors' widely known name contributed to the overall success. The timing and approach of the deal were also praised.
Philip Morris $1 billion eight-year debut global bond: Merrill Lynch
An outstanding deal that took the markets by surprise. Philip Morris alleviated investors' worries that recent litigation would eat away at tobacco companies' profits by providing just the type of product that investors wanted.
An outstanding deal that took the markets by surprise. Philip Morris alleviated investors' worries that recent litigation would eat away at tobacco companies' profits by providing just the type of product that investors wanted. Although the eight-year maturity was unusual, the deal succeeded because it offered a healthy 79bp over treasuries at a time when low absolute yields were encouraging investors to take higher risk.