A $450 million issue of 30-year subordinated notes by NationsBank Corp. got a good reception Tuesday on the heels of the company's strong earnings report.

Interest was especially strong from insurance companies, allowing Nationsbanc Capital Markets, which led the issue, to increase its size by 50%, from $300 million.

The bonds had a 7.25% coupon and yielded 7.372%, or 97.5 basis points over comparable U.S. Treasuries.

At current bond prices, demand from investors is strong on longer-dated paper, analysts said, since the returns on bank bonds with shorter durations have generally been declining relative to Treasuries.

"The 10-year market is the deepest, most heavily saturated on the maturity spectrum," said John Works, a bank bond analyst at J.P. Morgan & Co. "As a result, banks are increasingly exploring longer paper."

The positive market reception is a "sign of strength for NationsBank and for the market," said a treasurer at another bank.

John E. Mack, treasurer of NationsBank Corp., attributed the success of the deal to the strong earnings for the third quarter and the positive momentum generated by a 20-year deal a month ago. The previous issue also was increased in size, to $350 million from $200 million.

"I think the earnings quality reinforced the name," said Mr. Mack. "We reported $530 million for the quarter, with no real one-time items in there."

Some industry observers said that both of NationsBank's deals were attractive to investors because they were several basis points too cheap. They argued that the holding company could have got a better price by allowing outside managers to compete for the deal.

Others, however, contended that questioning the pricing on deals is a natural part of an intensely competitive underwriting process, and that it is hard to judge where a 30-year NationsBank deal should be priced, since the bank doesn't have any 30-year paper outstanding.

Mr. Mack said he was comfortable with the pricing.

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