Chemical Bank, Chase Manhattan Corp., and Bankers Trust New York Corp. raised a total of $3.50 million in subordinated debt on Friday.
Chemical issued $150 million of 12-year subordinated bank notes. The notes were priced to yield 6.7%, a spread of 85 basis points over the 10-year when-issued U.S. Treasury note.
Salomon Brothers was lead manager for the issue, rated A3 by Moody's Investors Service Inc. and A by Standard & Poor's Corp.
Chase Manhattan Corp. sold $150 million of floating rate subordinated notes in the Euromarkets. The issue has a coupon of 15 basis points under the London interbank offered rate.
The note also has a minimum rate of 5.5% and a maximum of 9%, which together are called a "collar."
Savings of 10 Basis Points
Market sources said the collared floating rate issue allowed the bank to save about 10 basis points, compared with the cost of issuing fixed-rate debt and swapping it into a floating rate payment stream.
Kidder Peabody International lead managed the issue, which was rated Baa2 by Moody's and BBB plus by Standard & Poor's.
Bankers Trust New York Corp. issued $100 million in convertible capital securities. The securities start as 40-year subordinated debt with a 7.5% yield.
The bank has the option of lowering the rate by 1.5 percentage points. At that time, investors can opt to exchange the debt for preferred stock, with a dividend equal to the debt's original rate.
