Two foreign bank units issued a total of $250 million in subordinated debt in the United States on Wednesday.

A unit of Banco Espanol de Credito issued $150 million of 10-year subordinated notes. The 8 1/4% notes were priced to yield 8.32%, 142 basis points over 10-year U.S. Treasury notes. Banco Espanol, known as Banesto, is the first Spanish bank to issue subordinated debt in the United States.

In addition, Svenska Handels-banken New York, a unit of the Swedish bank, issued $100 million of 15-year subordinated notes through Merrill Lynch & Co. The 8 1/8%, notes were priced to yield 8.25%, 137 basis points over 10-year U.S. Treasury notes.

The issue is rated A1 by Moody's Investors Service and A-plus by Standard & Poor's Corp.

For the debt issued to by Banco Espanol unit to count as capital under Spanish law, interest would be deferred if the bank does not earn a annual profit. Interest would continue to accrue and would be compounded. Interest payments would resume once Banco Espanol, known as Banesto, posted a profit for a six-month period.

Capital markets officials estimated that the interest-deferral clause raised the bank's cost of borrowing by 15 to 30 basis points.

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