Chase Manhattan Corp., responding to favorable conditions in the bond market, plans a big issue this week, industry sources said.
The deal could be for as much as $1 billion, market analysts said, noting that other money-center banks have successfully issued billion- dollar deals in recent weeks.
The market has been waiting for Chase to issue a sizable deal since early December, when it shelved a $500 million bond issue because of choppy market conditions.
Chase Manhattan declined to comment. But bond analysts said that the timing would be right, given favorable interest rates and a growing appetite among investors for bank paper.
"We have seen the billion-dollar-plus deals of J.P. Morgan and BankAmerica just blow out," said bank bond analyst Van Hesser of Goldman, Sachs & Co. "Chase could be looking at that and saying to themselves that this is the time to come to market."
Enthusiasm for bank paper has grown considerably in the last month as bank equities, the darlings of the market, begin to falter.
In early January strategist Abby Joseph Cohen at Goldman reduced the weighting of equities in the company's model portfolio by two percentage points and shifted that much to corporate bonds. Ms. Cohen also expressed bullishness on financial companies.
- Tania Padgett
Bank Plus ReadiesSale as Profits Fall
LOS ANGELES-Bank Plus Corp., reporting that its earnings declined 38%, to $1.1 million in the fourth quarter, said Friday that it has "indications of interest" from several potential acquirers.
The thrift, which hired Keefe, Bruyette, & Woods Inc. in August to identify potential acquirers, said it is hashing out the pricing and structure of possible deals but has received no definitive offer.
Bank Plus, the holding company for Fidelity Federal Bank, also said it adopted a shareholder-rights plan that would kick in if a would-be buyer deemed "coercive" by the board tried to buy 15% or more of the company's stock.
For the year, the $3.7 billion-asset thrift company posted a net loss of more than $56 million, or $2.90 per share, primarily due to loan losses and charges related to its subprime credit card portfolio.
Bank Plus said it has severed its relationship with credit card marketer America Direct Credit; it cut ties with another credit card marketer, MMG Direct Inc., in the third quarter.
But losses and delinquencies in the subprime card portfolio were still causing problems in the fourth quarter. Provisions for estimated loan losses were $15 million in the quarter, up from only $300,000 in the year- earlier period. Credit card loan delinquencies increased by 50%, or $25 million, during the quarter.
- Olaf de Senerpont Domis
Former Firstar CFOTo Join Auto Lender
CHICAGO-Jeffrey Weeden, the former chief financial officer of Firstar Corp., has joined auto lender Mercury Finance Co. as a consultant. Mr. Weeden is expected to become chief financial officer of Mercury when it completes its reorganization in federal bankruptcy court here. He joins veteran banker Edward G. Harshfield, a consultant to Mercury who is expected to be named chief executive officer. Mr. Harshfield resigned as vice chairman of California Federal Bank, a Golden State Bancorp unit, on Dec. 31.
Mr. Weeden, 42, was a 15-year veteran of Milwaukee-based Firstar and a predecessor bank. He lost his job at Firstar in November when the company was acquired by Star Banc Corp.
Mercury sought protection from creditors in May under Chapter 11 of the U.S. Bankruptcy Code. Its problems were first disclosed in January 1997 when it was discovered that profits from previous years had been overstated.