Mellon Bank Corp. said it will use the proceeds of its $250 million, 11-year bond issue priced last week to fund the acquisition of two lease companies, according to company spokesman Stephen Dishart.

Mellon said last month it is acquiring FULInc., a closely held Chicago vendor leasing company. It is also buying up Ford Motor Co.'s USL Capital Corp. with assets of $1.5 billion.

The USL unit will greatly expand the leasing operations of Mellon, which currently has a $1 billion leasing portfolio.

The Pittsburgh-based bank also issued $100 million in 1.5-year bank notes yesterday. The 11-year bond issue fits into the bank's strategy of graduating the maturity on its long-term debt.

It issued $250 million, 12-year notes in February and $300 million in 10-year notes in March.

Mellon also sold $650 million in home equity loan-backed floating-rate notes in March.

The bank will tap the debt or asset-backed securities market for the rest of this year, said the spokesman. It is keeping the proceeds of the $250 million debt issue in fixed-rate.

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