First Union Corp. completed its biggest junk bond assignment ever this week, sole-managing a $300 million issue of senior subordinated notes for Galey & Lord Inc., a fabric manufacturer based in Greensboro, N.C.

The Charlotte, N.C.-based banking company is touting the deal as a milestone for its junk bond effort, which was inaugurated in April 1995. First Union led $2.7 billion in junk bond offerings last year.

The Galey & Lord deal also follows by one week First Union's announcement that it had formed a textile, apparel, and furnishings industry group. The eight-member team will focus on offering banking and capital markets products to textile companies and will be headed by managing directors Bill Blue and Ron Wooten.

"Given that the bulk of textile companies are within our natural First Union footprint, we want to be a very significant player" in the industry, Mr. Wooten said.

The Galey & Lord bonds back the planned $465 million acquisition of Dominion Textile Inc. announced last year. First Union, which advised Galey & Lord on the transaction, is also leading a $490 million bank loan for the company.

The loan is set for completion in the next few weeks.

First Union has had a lending relationship with Galey & Lord since the manufacturer was spun off from Burlington Industries in 1988.

First Union recently completed its acquisition of Wheat First Butcher Singer, a regional investment bank. The purchase brought First Union equity underwriting and mergers and acquisitions advisory capabilities.

To take advantage of those skills, "we needed to be able to focus on specific industries where we have concentrations to bring value to them," Mr. Wooten said.

First Union executives say they plan to be well-positioned to capture financing opportunities emerging in the textile industry, where many middle-market companies, faced with the prospect of slow growth, are looking to do mergers and acquisitions.

Larry Cohn, head of research at Ryan, Beck & Co., said that First Union's effort to build an investment banking business has been "extremely successful and highly focused."

"They have not been distracted by going out and dealing with those outside of their service territory," Mr. Cohn said. "First Union has focused on serving its middle-market customer base for the vast bulk of what they've done."

"Within the superregional bank category they have been as successful if not more than any bank out there that is building an investment bank," Mr. Cohn said.

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