The Federal Reserve Board has given Valley National Bancorp (VLY) in Wayne, N.J., approval to redeem $127.5 million of trust-preferred securities.

The $16 billion-asset company has also been given the OK to issue $125 million in subordinated debt to fund the redemption, it announced Wednesday. Valley National expects to buy back the debt within a month.

The Trups debt carries an interest rate of 7.75%; Valley National did not say what it will pay for the new debt it plans to issue. A Valley National subsidiary issued approximately $200 million of Trups debt in 2001, of which the bank has previously redeemed approximately 36% in several buybacks. The $127.5 million redemption would extinguish that debt.

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