MNC Financial has successfully spun off its credit-card division in a public stock offering, raising enough money for the state's largest bank holding company to pay off $653 million in debts.

The stock of MBNA Corp. began trading on the New York Stock Exchange today at 10:27 a.m. The first block of purchases was for 1.5 million shares at $23 a share. MBNA was trading at $23.37 1/2 a share at noon and was the second most active, with 3.1 million shares traded. The stock is trading under the symbol KRB.


At midday, the stock of MNC Financial was trading at $3 a share, up 25 cents.

MNC, the parent company of Maryland National Bank an American Security of Washington, will use the stock proceeds to repay $271 million to its banks on Feb. 4, $275 million to note holders on Feb. 5, and $107 million in other debt on or after March 19.


MNC last week said it expected the stock would sell at an initial price of between $21 and $23 a share.

All proceeds over $21 a share will be contributed to MNC's bank subsidiaries to boost their capital levels, the prospectus said.

Before trading began today, the 45 million-share stock offering in MBNA was sold to institutional investors, raising $1.004 billion. Of the 45 million shares, 38.3 million were sold at $22.50 a share. Another 6.7 million shares were sold at $21.23 to Alfred Lerner, chairman and chief executive officer of MNC Financial, and his insurance company, Progressive Corp. of Cleveland. Since Lerner and Progressive bought their stock directly from MNC, they did not pay the $1.27 per share underwriting charge.

Of the stock sale proceeds, $678.4 million goes to MNC, $51.6 million goes to MNC's subsidiary banks, Maryland National and American Security, $225.5 million goes to capitalize MBNA, and $48.6 million goes to compensate the stock underwriters and to cover other expenses, according to calculations based on the stock prospectus.

The different parties are to receive the proceeds on Jan. 29, when the sale is closed.

Another $86 million is expected to be raised due to an option that allows the underwriters to sell an additional 3.8 million shares of stock to cover demand. The credit card company, which was known as MBNA America while it was a subsidiary, is considered MNC's jewel.