Banks retreated from issuing bonds in October, but are expected to return to the capital markets in November as fears about rising interest rates strengthen.

Commercial banks issued $10.1 billion of corporate debt this month, off from $14.7 billion in September, according to Securities Data Co.

But some fixed-income analysts said issuers were just taking a breather. "Bank debt will pick up substantially because of the interest rate scenario," said fixed-income analyst Katherine Rossow of Chase Securities Inc. "Because interest rates have started to tick up, people don't want to miss the lows."

Ms. Rossow added that the pressure on banks to repurchase stock is another factor that could encourage banks to issue debt. "There has been severe pressure from equity analysts for banks to do stock buybacks," said Ms. Rossow. "There have been thoughts among bankers about issuing debt in order to repurchase shares."

Ms. Rossow said such a strategy could lead banks - particularly smaller ones - to overleverage themselves, but "banks are so highly capitalized that you have to go a long way before it becomes a concern."

Funding repurchases through debt is uncommon for banks, said fixed-income analyst Matthew Burnell of Merrill Lynch & Co. But he said "there is a lot of pressure on CFOs and CEOs to boost returns on equity, with earnings growth being fairly sluggish in the past couple quarters."

Mr. Burnell said the level of debt issued in October was normal. "September was more the aberration, because NationsBank Corp. and Chase issued large" securities.

One trader tied the decline in bank bond issuance in October to the disclosure of third-quarter earnings numbers.

"Banks are advised not issue prior to earnings because it leaves a bad taste with investors," said one trader who declined to be identified. He said issuance returned to normal following earnings season.

Among the larger issues of the month were Bankers Trust New York Corp.'s $150 million of 15-year subordinated debt, Citicorp's $200 million of 15- year subordinated notes, BankAmerica Corp.'s $250 million of three-year notes, and National City Bank.'s $200 million of subordinated notes.

J.P. Morgan analyst John Works also noted that issuing debt has become slightly less attractive in the last couple weeks because of unfavorable trends in the swaps market, where bankers trade fixed-rate paper for floating-rate paper.

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