Investors scurry to buy stock in MBNA Corp.


The new stock for MBNA Corp., the former credit car subsidiary of MNC Financial Inc., has received a warm reception on Wall Street, jumping from an initial offering price of $22.50 a share to $23.75 by early afternoon today.

MBNA was the second most active stock on the New York Stock Exchange, with about 1.7 million shares traded by early afternoon today. Ford Motor Co. was the most active.

Yesterday MBNA also was the second most active stock, behind Citicorp, with about 4.1 million shares changing hands.

The stock of the parent company, MNC, was up 12 1/2 cents, to $3.12 1/2 in early afternoon trading today. MNC rose 25 cents a share yesterday.

MNC, the state's largest bank-holding company, spun off its profitable credit-card operation to raise money to pay debts. The offering of 45 million shares raised just over $1 billion. Of the pTC proceeds, $51.6 million goes to MNC's subsidiary banks, Maryland National Bank and American Security Bank of Washington, to strengthen their capital levels.

The new company, which had been known as MBNA America, is based in Newark, Del. Its stock trades on the NYSE under the ticker symbol KRB.

"What people are buying are what they consider the jewels of a bank," said Claire M. Percarpio, a bank analyst for Duffs & Phelps Inc., a Chicago investment research firm. "They can buy the jewels without the rocks," she added.

"This is a one-of-a-kind" offering, said Tony Davis, an analyst at Wheat First Securities in Richmond, Va. "This is the first public offering of a bank credit card business and it's arguably the best," he said.

MNC also announced yesterday that it signed an agreement to sell its mortgage warehousing lending unit, which has been a division of American Security.

The buyer is Residential Funding Corp., a mortgage banking and securities subsidiary of GMAC Mortgage Corp.

The transaction, which should be completed in the next two months, involves the sale of $300 million worth of short-term secured loans that American Security had made to mortgage lenders throughout the country. The bank will receive about $300 million for the loans, and there will be no profit or loss from the transaction, according to MNC spokesman Daniel Finney.

While there is no gain, the sale does free $25 million in capital that had been set aside to support the loans, Finney said. This in turn helps improve the bank's ratio of capital to assets.

Residential Funding indicated that it intends to retain the existing employees of the mortgage warehousing division, managed by Lawrence B. Pendleton 3rd, at its current locations in Washington, Northern California and Florida, according to the MNC release.

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