Capital: NaionsBank Taking $500 Million Issue Of Floating-Rate Notes to

NationsBank Corp. is preparing to launch $500 million of five-year floating-rate notes next week in its first Eurobond offering.

The Charlotte, N.C.-based bank is tapping overseas funding sources as the appetite for U.S. bank debt in the European market picks up. The demand has created favorable pricing for issuers, particularly relative to a U.S. market glutted with new corporate debt issues.

"The Euromarket is a much cheaper source of funding," said Ronnie Dick, a managing director of PaineWebber International.

The Euromarket is especially receptive to floating-rate debt with an A rating or better. NationsBank carries an A-2 rating from Moody's Investors Service Inc. and an A from Standard & Poor's Ratings Group.

Although BankAmerica Corp., Bankers Trust New York Corp., and Chemical Banking Corp. have tapped the Euromarket in the last few weeks with their own five-year issues, the NationsBank debt is still expected to receive a good reception from investors.

"In the second quarter, investors have become more comfortable," Mr. Dick said, noting that investor wariness brought on by the Mexican debt crisis and the collapse of Barings PLC, the British investment bank, have subsided.

European investors are not only confident, but are flush with cash and searching for yield in floating-rate instruments. This directly benefits banks, which provide an estimated 90% of the floating-rate market.

Mr. Dick predicted the NationsBank issue would be well received.

While it is the newest bank participant in the Eurobond market, NationsBank is a familiar name to the more sophisticated European investors who have bought medium-term notes from the banking company, Mr. Dick said

Additionally, he said the bank has done an "extremely good public relations job leading up to this issue."

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