Citicorp issued $100 million of fixed-rate subordinated debt in the Euromarkets Friday, the first such issue by a U.S. bank in seven years.

The 10.5-year issue will save Citicorp 10 to 12 basis points on the cost of a comparable issue in the U.S. market, a company official said.

The debt was priced to yield 7%, 1 00 basis points over the 10-year U.S. Treasury note. In comparison, Citicorp's U.S. subordinated debt was recently trading at 113 basis points over Treasuries, according to First Boston Corp.

Citicorp will wind up with a floating-rate payment structure. It agreed to,swap its fixed payments for floating-rate payments equaling 70 basis points over the London interbank offered rate.

Kidder Peabody International Ltd. was lead manager for the debt offering.

"Essentially, Kidder Peabody is marketing this to retail accounts, who are a little less sensitive to basis-point-by-basis-point tightening," the Citicorp official said.

A Kidder official said the debt was being marketed mainly to money managers in private banks, especially those based in Switzerland, with some interest expressed by investors based in the Benelux countries and Hong Kong.

|An Opportunistic Funding'

"This is something we view as an opportunistic funding," said the Citicorp official, "because we save 10 basis points and we distribute to investors that we don't normally issue to frequently, that is, European retail accounts."

Domestic bond issues are typically bought by institutional investors, he said.

"We're essentially substituting new paper for paper that we expect to redeem later this year," said the official, who declined to name likely debt candidates for redemption.

The banking company's total capital ratio was 10% at the end of the first quarter.

No Trend Foreseen

Citicorp subordinated debt is rated Baa3 by Moody's Investors Service and BBB-plus by Standard & Poor's Corp.

A number of U.S. banking companies have issued floating-rate subordinated debt in the Euromarkets since last year, but they are unlikely to follow Citicorp into fixed-rate offerings in large volume, market sources said.

This is because other U.S. banks that are well known among European investors are unlikely to achieve the same interest savings as Citicorp. Their U.S. debt is already trading at tight yield spreads to Treasuries.

These other U.S. banking companies include Chemical Banking Corp., J.P. Morgan & Co., Bankers Trust New York Corp., and Republic New York Corp.

Also on Friday, Webster Financial Corp. issued $40 million of senior debt through Merrill Lynch & Co., to yield 8.75%, 322 basis points over the seven-year Treasury note.

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