Bank issuance of medium-term notes continued to gain steam Thursday, with NBD Bank and Bankers Trust New York Corp. bringing a total of $400 million of three-year debt to market.
Bankers Trust issued $300 million in floating-rate Eurobonds due May 27, 1998. The notes, underwritten by Merrill Lynch International with Bankers Trust International acting as senior comanager, carry a coupon of 18.75 basis points over the three-month London interbank offered rate. The note is rated A by Standard & Poor's.
NationsBanc Capital Markets Inc. brought $100 million notes to market for NBD Bancorp's main unit. The noncallable notes are due on May 11, 1998, and are priced initially at par to yield 6.85%. The spread is 38 basis points above three-year Treasuries.
Standard & Poor's gave the NBD notes an AA rating, while Moody's Investors Service Inc. rated it Aa2.
Loan growth appears to be spurring the new issues.
NBD has been an active issuer of medium-term notes, said Sheryl S. Harrison, a vice president and bond analyst at PNC Asset Management Group.
The Detroit-based bank has been issuing the notes under a $4 billion continuous issue program, which the bank increased last June.
NBD has been more reliant on purchased funds than more retail-oriented banks like First Interstate Bancorp, said Ms. Harrison.
In related news, Chase Manhattan issued another $150 million in 10-year subordinated debt, priced at a spread of 116 basis points above Treasuries of comparable tenure. The issue is noncallable for three years and is rated A3 by Moody's and A- by Standard and Poor's.
