CoreStates Capital Corp.'s $200 million issue of subordinated medium-term notes won anA rating from Duff & Phelps Credit Rating Co.
The noncallable notes were priced to yield 6.778%, or 62 basis points, above Treasuries. CoreStates Capital is the funding subsidiary for CoreStates Financial Corp., which guarantees the payment of principal and interest.
Duff said CoreStates Financial has become one of the commercial banking industry's most profitable institutions due mostly to its conservative credit culture and management's proactive stance on improving operating efficiency.
CoreStates Financial's asset quality performance has been "excellent," Duff said, considering that it conducts a majority of its business in the Middle Atlantic region, which continues to experience sluggish economic growth.
It recently completed a corporate redesign program, called Best, which will produce $180 million in annual expense savings, Duff said.
The April acquisition of Meridian Bancorp, a Reading, Pa.-based bank holding company with nearly $15 billion in assets, has solidified CoreStates Financial's market presence and provides significant expense savings opportunities, Duff said.