PNC Financial Services Group Inc., which is to become the fifth-largest U.S. bank by deposits once it closes its deal to buy National City Corp., plans to sell $2.9 billion of notes backed by the Federal Deposit Insurance Corp., according to people familiar with the offering.
The benchmark sale is to be divided between $400 million of 2.5-year notes that may float at 28 basis points more than the three-month London interbank offered rate, or Libor, and $2.5 billion of fixed-rate securities due in 2.5 and 3.5 years, said one of the persons, who declined to be identified because the terms are not set.
A planned $2 billion of 3.5-year debt may yield 48 basis points more than the mid-swap rate, and a planned $500 million of 2.5-year notes may yield 28 basis points more than the benchmark, the person said.
The bank's PNC Funding Corp. unit was to issue the debt as early as Wednesday. Three-month Libor is currently 1.58%. Bonds guaranteed through the FDIC's Temporary Liquidity Guarantee Program are rated Aaa by Moody's Investors Service and AAA by Standard & Poor's, their highest rankings.