By Kellie Geressy, Anusha Shrivastava and Romy Varghese Of DOW JONES NEWSWIRES NEW YORK -(Dow Jones)- Becoming the fourth major U.S. bank to take advantage of a government guarantee, Bank of America raised $9 billion in the bond market on Monday.
This brings the total amount of bonds that fall under the Federal Deposit Insurance Corp's Liquidity Guarantee program to $26.25 billion.
Citigroup will sell a benchmark-sized offering - which typically means more than $1 billion - on Tuesday, according to a source familiar with the deal. Wells Fargo is also expected to tap the market later this week.
U.S. and overseas money managers, banks, insurance companies, foreign central banks and others have bought government-backed bank debt as its government guarantee makes it appealing to broad range of investors.
The government hopes the temporary program will give a necessary jolt to stagnant credit markets, and open up lending to consumers and companies that have struggled to find financing in recent months.
Banks can issue debt over the next six months under the scheme, and the guarantee is good until the end of June, 2012.
Bank of America's bonds included $6.75 billion of 3.5-year fixed-rate notes, $1 billion of two-year floating-rate notes, $750 million of three-year floating-rate notes and an additional $500 million of three-year floating-rate notes.
Details on the 3.5-year piece were unavailable, but preliminary guidance put it at a spread of 83 basis points over midswaps. The $1 billion two-year floating-rate piece sold at a spread of 50 basis points over three-month Libor and the $750 million three-year floating-rate piece sold at a spread of 82 basis points over three-month Libor. The additional $500 million three-year floater sold at 76 basis points over one-month Libor.
The issue was rated triple-A by Moody's Investors Service and Standard & Poor's.
The Bank of America deal came just as the government spoke further about intervening in financial markets to help get credit moving again.
Federal Reserve Chairman Ben Bernanke helped touch off a dramatic rally U.S. Treasurys after he said that the central bank could buy "substantial quantities" of longer-dated Treasurys and debt issued by government-sponsored enterprises like Fannie Mae (FNM) and Freddie Mac (FRE).
-By Kellie Geressy, Anusha Shrivastava and Romy Varghese; Dow Jones Newswires; (201) 938-2050; kellie.geressy@dowjones.com
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(END) Dow Jones Newswires
December 01, 2008 17:43 ET (22:43 GMT)

Publié le 01 Décembre 2008 Copyright © 2008 Dowjones