At press time, First Union was closing an approximate $200 million collateralized debt obligation backed by bank capital trust pass-through certificates. The second-of-its-kind deal, called Preferred CPO, is said to be similar to Salomon Smith Barney's $225 million Regional Diversified Funding (RDF) which closed in late March.

"Now that they've got one under their belt, there are a couple of other banks looking to do similar deals," said an analyst familiar with these transactions. "First Union is one example. There's another deal that should come within the next few months."

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