Banks, Thrifts Flock to Market As Rates Drop

Banks and thrifts rushed to take advantage of low long-term interest rates on Thursday by raising new capital in the debt and equity markets.

Mellon Bank Corp. issued $100 million in 10-year subordinated notes. The offering, lead managed by First Boston Corp., was priced 145 basis points over comparable Treasuries, for a yield of 9.25%.

Golden West Financial Corp., a California-based thrift, issued $100 million in seven-year subordinated notes in an offering underwritten by Lehman Brothers Inc. The notes were priced to yield 8.68%, 107 basis points over comparable Treasuries.

Royal Bank of Scotland Group PLC completed an offering of $193.7 million in preference shares.

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