As Interest Rates Drop, Banks Return to the Market
With interest rates down and second-quarter earnings announcements behind them, a number of banks are raising new capital.
Norwest Corp. completed an offering of convertible preferred stock, boosting the size to $200 million from the $175 million previously announced.
The shares are priced with a dividend of 7%, and they are convertible into common stock at $36.45 per share, 22% over Norwest's stock price at the close Thursday. Morgan Stanley & Co. was lead manager of the deal.
A $175 Million Issue Proposed
Bank of New York filed a registration statement covering a proposed $175 million issue of convertible subordinated debt. Goldman, Sachs & Co. will lead manage the offering.
And J.P. Morgan & Co. sold $150 million in 12-year subordinated debt Thursday through underwriters at First Boston Corp. The securities were priced with an 8.5% coupon, 58 basis points over the when-issued 10-year Treasury.
The deal was said to be selling slowly Friday, but the poor results of the Treasury's auction of 30-year bonds was said to be the main culprit.
In the equity market, Puget Sound Bancorp of Tacoma, Wash., said it plans to issue 1.5 million new shares. Merrill Lynch & Co. and Salomon Brothers will manage the offering.
