BANKAMERICA ASKS JAPAN BANKS TO BUY SECURITIES
BankAmerica Corp <BAC> asked Japanese
commercial banks today to buy 350 mln dlrs in subordinated
capital notes and preferred stock that it plans to issue to
boost its equity base, a company spokesman said.
    BankAmerica vice chairman Frank N. Newman held a meeting
here today to outline its fund-raising plan to some 20 Japanese
banks, he told Reuters.
    He also stressed the company's efforts to streamline
operations, by withdrawing from unprofitable energy-related
areas to concentrate more on its Californian home base.
    But Newman said the company had no intention of selling its
 Seafirst Corp Subsidiary in Washington.
    A document obtained by Reuters shows the fund-raising
effort involves 250 mln dlrs in 12-year subordinated capital
notes and 100 mln in convertible preferred stock.
    It has made a shelf registration with the SEC so that it
can issue debt securities whenever market conditions are
favorable.
    The company already raised 100 mln dlrs in the U.S. Market
last month, he added.
    According to the document, the 250 mln dlrs in subordinated
capital notes will carry an interest rate of 100 basis points
over the three-month London Interbank Offered Rate (LIBOR). The
minimum rate will be six pct and the maxiumum 12 pct.
    The notes will be redeemable at par after four years and
will also have warrants attached to purchase the firm's common
stock at 17.50 dlrs. There will be 7.5 mln warrants in all,
with a term of 10 years.
    The planned convertible preferred stock will carry a
dividend rate equivalent to three months LIBOR plus an as yet
undecided premium, the document said. There will be no sinking
fund for the preferred stock, which will have 10-year warrants
attached to buy BankAmerica common stock.
    The rest of the details of the preferred stock issue have
yet to be worked out.
    On both the preferred stock and note issues, BankAmerica
said that a fixed rate alternative was possible.
    The document said that BankAmerica was also open to raising
funds in yen, if that was desirable for the Japanese.
    Those present at the meeting today were working-level
officials from 13 city, three long-term credit and seven trust
banks, Japanese banking sources said.
    Newman expressed hope that certain banks would act as lead
managers of the projected debt securities but did not name
specific banks, the sources said. No bank made any commitment
to the company's fund-raising plan as most knew little about it
in advance, they said.
    "Today's meeting itself was held with very short-notice and
we just can't decide what to do with it," said a senior official
at a leading city bank.
    Newman attempted to quell Japanese bankers' fears that the
U.S. Federal Reserve may insist that they deduct the equivalent
amount to the securities purchased  from their primary capital,
under a regulation now being studied by the U.S. And Britain.
    Newman told them that they should not worry because he
understood the U.S. Federal Reserve would not go along with
such a regulation, the official said.
 REUTER
