Sovereign Bank was in the market late last week with a lease-backed structured deal agented by Salomon Brothers. The deal, structured in two tranches, totaled $310 million.

As last week came to a close, it was apparent that private placements were indeed picking up as market players buzzed in new deals. Sovereign Bank issued a $203 million class A-1 tranche that priced at 350 basis points over Treasurys. The notes were offered with a five-year final maturity and four-year average life and carried a pastor certificate attachment. One source close to the transaction explained, "the lease and trust are secured by manager and then passed through to the investor."

The group also offered a second tranche of $107 million of class A-2 notes with a 20-year bullet maturity. "This one's expected to price in the high [400 basis points over Treasurys range]," said one buyside source considering the deal.

Sovereign Bank, a subsidiary of parent company Sovereign Bancorp, Inc. required the funding for the acquisition of Fleet Bank branches.

The group continues their growth process and moves forward with the remaining phases of expansion. Sovereign Bancorp includes approximately 575 banking offices that span the New England States, including Pennsylvania, north Delaware, New Jersey, Connecticut, New Hampshire, Rhode Island and Massachusetts.

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