NationsBank Corp. issued $300 million of debt Tuesday, saying it may use part of the proceeds to finance acquisitions of other financial institutions or their assets.

NationsBank, which would not comment on its acquisition strategy, is rumored to be eyeing mortgage companies, a Wall Street analyst said.

The Charlotte, N.C., bank holding company's mortgage business is not seen as big enough for a company its size.

The hiring of former Fleet Mortgage executive Andrew D. Woodward to direct its mortgage unit is seen as a sure sign of its intentions.

A Rumored Target

Specifically, NationsBank is rumored to be interested in La Jolla, Calif.-based American Residential Mortgage.

The 10-year subordinated noncallable notes have an interest rate of 7.75% and qualify as Tier 2 capital under the Federal Reserve Board's capital guidelines.

The issue was priced at 99.571, and is 69 basis points over the 10-year Treasury. Last year, NationsBank filed a $4 billion shelf registration statement with the Securities and Exchange Commission.

Comanagers of the Issue

Merrill Lynch & Co., NationsBane Capital Markets Inc., Bear, Stearns & Co., Chemical Securities Inc., and Salomon Brothers Inc. comanaged the issue.

NationsBank said that in addition to acquisitions of financial institutions, the funding would be used for corporate purposes, including additions to working capital and additional contributions to the capital of NationsBank subsidiaries.

Separately, First Union Corp. issued $150 million of 15-year subordinated notes yielding 8.024%.

The issue was underwritten by Goldman, Sachs & Co. and is noncallable for 10 years.

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