Amsouth Bancorp. filed shelf offering for $300 million in debt, joining the list of banks that have recently filed plans to issue debt.
The Birmingham, Ala., bank will use the proceeds of debt issuance to help pay for four recently announced acquisitions, each of which requires part of the payments in cash, according to a spokesman.
The bank said that those four deals entail payments of around $200 million in cash. The biggest piece of that sum, $142.5 million, will go to Fortune Bancorp, in Clearwater, Fla.
The bank said it has some cash on hand, but needs to issue debt to make up the balance.
Other Possible Uses
In a filing with the Securities and Exchange Commission, the bank said that in addition to acquisitions, the proceeds could be used for the reduction of short-term debt or the extension of credit to its subsidiaries.
Capital market sources said that banks issuing debt now can take advantage of the current low interest rates to lock in a bargain-basement cost of funds and protect their net interest margins.
Over the past few months, some big banks including Citicorp and NationsBank have filed shelf offerings. Bank of New York Co. has the most recent filer, announcing earlier this week plans to sell $665 million in securities.
