Butterfield Bank yesterday said it has issued $150 million in subordinated lower tier II capital notes.

The notes were issued as a $90 million in Series A Notes due in 2015 and a $60 million in Series B notes due in 2020. The notes issued under Series A will pay a fixed coupon of 4.81 percent until 2 July 2010 at which point the notes will become redeemable in whole at the option of Butterfield Bank.

The Series B Notes will pay a fixed coupon of 5.11 percent until 2 July 2015 when they will also become redeemable in whole at the bank?s option.

The Series A Notes were priced at a spread of one percent over the five-year US Treasury yield and the Series B Notes were priced at a spread of 1.10 percent over the ten-year U.S. Treasury yield.

The exclusive placement agent for the transaction was Lehman Brothers. The Notes have been rated A- by Fitch, Baa1 by Moody?s and BBB+ by Standard & Poor?s.

The issuance was by way of private placement with US institutional investors. No application has been or will be made to list the notes in the US.

The notes will be listed on the Bermuda Stock Exchange in the specialist debt securities category.Richard Ferrett, executive vice president and chief financial officer said: ?We are extremely pleased with this transaction, our second in the US private placement market. We believe its success is a reflection of investor long-term confidence in Butterfield Bank. The proceeds of the issue will be used for general corporate purposes.?