AmSouth Bancorp on Thursday began marketing $150 million in subordinated debt, following on the heels of a similar deal by rival SouthTrust Corp. earlier in the week.
The banks, both based in Birmingham, are raising tier two capital to support balance sheet growth.
The 10-year AmSouth issue was being marketed Thursday to yield 75 to 80 basis points over the 10-year U.S. Treasury note. Market sources said the sale of the debt was made more difficult by the extreme volatility in the Treasury market yesterday. The 30-tear bond price fell nearly two percentage points, and the 10-year note fell more than 1 point through mid-afternoon to yield about 7.00%.
SouthTrust, which has slightly lower credit ratings, on Tuesday issued $100 million of 10-year subordinated notes, priced to yield 7.684%, or 85 basis points over Treasuries.
Separately, Chasde Manhattan's issue of adjustable rate preferred stock is expected to be priced and expanded today from its original $150 million size to $227.5 million, said a market source.