UJB Financial Corp. plans to issue $100 million to $150 million in subordinated debt before yearend.

The deal would mark UJB's first public offering of debt in 20 years and its first ever of subordinated debt, said William Healy, executive vice president and controller.

The Princeton, N.J.-based company will use the proceeds to push the total capital ratios of three bank subsidiaries above 10% Mr. Healy said.

A total capital ratio of at least 10% is one of the requirements to qualify as "well capitalized" under new Federal Deposit Insurance Corp. rules.

Lower Premiums in Return

Well-capitalized banks will pay lower deposit insurance premiums under a plan that goes into effect in January. They will also have greater leeway in using brokered deposits.

"Our intention is to access the market for subordinated debt in the short run," Mr. Healy said.

Subordinated debt counts as Tier 2 capital. UJB, with $13.5 billion in assets, has about $30 million in long-term debt outstanding that regulators count as Tier 2 capital. "We're very underleveraged at this point," he said.

UJB's three New Jersey bank subidiaries, with a total of $10.8 billion in assets, had total capital ratios ranging from 8.73% to 9.4% at the end of September, Mr. Healy said.

Other Units Exceed 10%

The ratios at the holding company and its Pennsylvania banks all exceeded 10%, he said.

UJB filed a shelf registration on Oct. 28 for $350 million of subordinated debt and $100 million of preferred stock. The registration has been approved by the Securities and Exchange Commission.

Last week, Moody's Investors Service Inc. upgraded UJB, raising its preferred stock one notch to Ba1.

Its subordinated debt was given the same rating, which is one notch below investment grade. Standard & Poor's Corp. rates the preferred stock and subordinated debt an investment-grade BBB-minus.

Merrill Lynch & Co., A.G. Edwards & Sons Inc., and Wheat First Butcher & Singer Capital Markets will underwrite the sale of subordinated debt, which will have a 10-year maturity, according to the bank's SEC filing.

The three underwriters were tapped because this summer they handled a sale of UJB common stock that raised net proceeds of $68.3 million, Mr. Healy said.

UJB is bouncing back from commercial real estate problems. After losing $5.5 million in 1990, the bank earned $22.4 million last year and $36.1 million in the first three quarters of 1992.

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