Magazine article American Banker

Bank of New York Issues Notes in Plan to Shed Expensive Debt

Magazine article American Banker

Bank of New York Issues Notes in Plan to Shed Expensive Debt

Article excerpt

In preparation to redeem expensive debt, Bank of New York Co. issued $250 million in 10-year subordinated notes on Tuesday.

The notes were priced to yield 6.55% and were sold via a competitive bid won by Goldman Sachs & Co. The selling concession is $3 and the reallowance is $2.50.

Bank of New York's cost to issue the notes was about 78 basis points over Treasuries. Goldman offered the notes at a spread of 72 basis points, which a source at the bank characterized as a "pretty good" spread.

The notes were rated Baa1 by Moody's Investors Service Inc. and A-minus by Standard & Poor's Corp.

This is the banking company's second debt issuance in the past six months. In June, the bank issued $300 million in 10-year notes that yielded 6.625%.

The bank will use part of the $550 million in proceeds from those two debt sales to redeem $400 million in outstanding equity-contract notes, which are due 1997, according to William Burns, vice president for financial planning at the bank. …

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