Discover Financial Services launches 10-yr notes-IFR

NEW YORK, July 10 (Reuters) - Discover Financial Services (DFS.N), the fourth-largest U.S. credit card network, on Friday launched a $400 million sale of 10-year notes with an expected yield of 10.25 percent, according to IFR.

JPMorgan Chase is managing the sale, rated Ba1 by Moody's Investors Service and BBB-minus by Standard & Poor's, according to IFR, a Thomson Reuters service.

Earlier this week, Discover said it would receive $480 million from an offering of common equity to strengthen its balance sheet and possibly repay U.S. government bailout funds.

Yields on Discover's 10-year notes are higher than the only new issue sold in the high-yield market on Thursday, according to IFR. Regal Cinemas, with a mid-level junk rating of B1 and B-minus, sold 10-year notes yielding 9 percent.

Moody's downgraded Discover to junk status in June, citing reduced access to the securitization market, historically an important funding source for the company. Standard & Poor's rates Discover the lowest investment grade.

(Reporting by Dena Aubin, Editing by Chizu Nomiyama)