Shawmut National Corp. is set to issue $100 million in preferred stock in what would be the lowest-rated such issue by a major bank this year.

The issue could come to market as early as next week, a capital markets source said. A spokesman for the Hartford, Conn., bank declined to comment.

Shawmut's preferred stock carries speculative-grade ratings of Ba3 from Moody's Investors Service and B from Standard & Poor's Corp.

Market sources predicted Shawmut would need to pay a premium over the preferred stock yield paid by Bank of Boston Corp. Bank of Boston's preferred stock ratings of Ba1/BB are stronger than Shawmut's but are still speculative grade.

Bank of Boston's preferred stock was trading at a yield of about 8.75% Tuesday.

Investors have bid up the prices of Shawmut securities since last year on the belief that the bank has turned the corner on overcoming its loan problems.

For example, Hartford National Corp.'s 9.85% bonds, which are due in 1999 -- and are obligations of Shawmut -- have more than doubled in value since July 1991, when the securities were trading at a steep discount. They are now trading at a premium over par, according to Keefe, Bruyette & Woods.

Even without the offering, Shawmut exceeds regulatory capital requirements, with 7.26% Tier 1, 5.43% leverage, and 11.19% total capital ratios at the end of June.

Acquisitions Possible

Additional Tier 1 capital from the sale could help Shawmut make major acquisitions in the New England market, said Gerard Cassidy, banking analyst with Hancock Institutional Equity Services.

"It's fair to say they're not overcapitalized," Mr. Cassidy said. "More capital will allow this bank to flex its muscles to buy assets."

Analysts speculated that Shawmut and other banks that want to acquire failed banks and thrifts in New England may need to tap the markets for cash to pay for the deals.

They added that even acquisitions of healthy institutions may be done on a cash basis rather than with stock.

"One hundred million dollars of preferred stock will be important, but just as important will be an accelerating rate of recovery" in the bank's assets, one analyst said.

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