Capital: Joining Trend, Wachovia Launches $500M Offering In the

Wachovia Corp. has followed other big-name banks into the foreign capital markets, issuing $500 million in floating-rate Euronotes.

The issue, which is Wachovia's first entry into overseas capital markets, was priced flat over three-month London interbank offered rates, giving a discount margin of 4 basis points over Libor after fees.

Merrill Lynch, the lead manager, said the pricing is equivalent to 30 or 31 basis points over comparable 5-year Treasuries, which is appropriate for a company with Wachovia's high credit ratings.

Wachovia's chief financial officer, Robert S. McCoy, said the issue would "open up a new market" for the bank, attracting foreign investors who had not previously invested in it.

Analyst Stanley August of Nationsbanc Capital Markets said it was Wachovia's well-known and strong credit rating that enabled it to enter the European markets. "Europeans are rating-sensitive," he added. "It is more difficult to issue there."

The senior debt issue was rated double-A2 by Moody's Investors Service and double-A-plus by Standard & Poor's.

As "banks continue to suffer from slow deposit growth and disintermediation, Eurobonds are becoming increasingly attractive," said analyst Blaine Frantz at Advest.

Other banks that have tapped the foreign capital market include Comerica, which issued $300 million in Eurobonds; NationsBank, which issued $500 million in Eurobonds; and BankAmerica, which issued $200 million.

In other news, NationsBank issued $500 million in seven-year senior notes Tuesday.

The noncallable notes were priced at a spread of 50 basis points above Treasuries. The issue will be sold through underwriters led by Nationsbanc Capital Markets Inc.

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