First Union Corp., facing Wall Street skepticism, has had to pay investors a hefty premium on its $350 million of bonds that started trading on Tuesday, analysts said.

The Charlotte, N.C., banking company priced the five-year bonds on Monday at 129 basis points above comparable Treasuries. That was as much as 7 basis points above comparable First Union bonds trading on the secondary market, according to varying price reports from trading desks.

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