One of the most dramatic stock sales in Washington history took place last week when MNC Financial Inc., in desperate need of cash, was forced to sell its lucrative credit card operation to public investors for $955.3 million. MNC, a troubled regional bank, needed the money to pay its debts.

MNC's credit card subsidiary, now called MBNA Corp., was the crown-jewel of the MNC empire. It was a steadily growing source of profit, contributing $129 million to MNC last year.

Its sale to investors was proof, if any was needed, that MNC is still trying to crawl out from under the heavy losses it has suffered in the collapse of the commercial real estate market in the Washington-Baltimore area.

MNC lost more than $240 million in just the first nine months of 1990, and more losses were expected for the fourth quarter.

MNC stock, which once sold for almost $30 a share is now at $3 a share.

The sale of 45 million MBNA shares was handled by Goldman, Sachs & Co., a New York investment banking firm. Although some of the pension funds and mutual fund managers who bought MBNA shares admitted they had serious questions about what will happen to the credit card business during a recession, they said they were impressed by the high quality of MBNA's operation.

So they snapped up the shares at $22.50 each.

In fact, the sale went so well that Goldman, Sachs probably will sell an extra 4.5 million shares in what is called a green shoe -- an old phrase that describes a supplementary sale of a popular stock.

At the end of the week, after four days of trading on the New York Stock Exchange under the symbol "KRB," the stock closed at $24.375, a gain of $1.87 a share.

The stock will pay an indicated $1.60-a-year dividend, giving it a 6.6 percent yield.

With 1990 earnings of $2.87 a share, based on 45 million shares, the stock was selling for 8.5 times earnings.

The MBNA stock sale, however, had some odd wrinkles. Last October, MNC tried to sell the credit card operation privately. Apparently, there were several interested parties. But for reasons that have not been revealed, a private sale did not take place.

Meanwhile, MNC was under growing pressure to come up with new money to pay its debts. So Goldman, Sachs filed the stock offering with the Securities and Exchange Commission on Dec. 10, in case the private sale didn't go through.

Finally, MNC decided to go ahead with the public sale. Time was short but the deal cleared the SEC with unusual speed. The stock went on sale only six weeks after the deal was filed.

The sale also took place only two weeks before the Feb. 4 deadline for MNC to pay back $271 million it had borrowed from its two subsidiaries, Maryland National Bank and American Security Bank.

During this time, federal bank regulators who approved the unusual loans, were watching over MNC's shoulder to make sure the sale price was high enough to allow MNC to repay its loans.

During the fall, when the credit card sale was under consideration, the stock market was badly depressed by events surrounding the Iraqi invasion of Kuwait. When the war finally began and the initial reports were positive, the Dow industrials soared almost 115 points on Jan. 17, giving the market its strongest tone in months.

Three days later, Goldman, Sachs called off the rest of its "road show" or sales tour, priced the stock at $22.50, which was the high end of its $21 to $23 range, and gave the deal a green light.

Investors and analysts were generally enthusiastic about the outlook for the stock but their comments fell short of three cheers.

Among the buyers was Fidelity Investments Inc., which operates the nation's largest family of mutual funds.

Fidelity analyst Bruce Herring said he was intrigued by the fact that MBNA is the only public company that is a "pure play" on the credit card business.

Other companies that deal in credit cards, such as Sears Roebuck & Co., American Express Co. and Citicorp, he said, all carry other baggage such as loans for real estate development, leveraged buyouts and Third World development.

MBNA, on the other hand, is now a stand-alone bank with only one business, credit cards -- and no other baggage.

"It's a pure play on a good business," said Herring.

The other advantage to the investor, he said, is that MNC came to market as a "distressed seller," and everybody knew it. Consequently, he said, although MBNA may have been worth more, MNC was going to have a hard time getting more.

One drawback to the stock, Herring noted, was that the credit card business, which has developed rapidly in recent years, has never been through a tough recession and so investors do not really know how the business will fare.

"The future is a little uncertain," he said.

The past, however, clearly has been golden. Having grown rapidly in a prosperous era, MBNA is the nation's largest issuer of gold MasterCard cards and the fourth largest issuer of premium Visa credit cards. MBNA has 4,000 employees.

At MBNA, gold cards account for 42 percent of the company's active accounts and 58 percent of the company's $7.4 billion in managed loans. This is important to MBNA because gold card business is more profitable than standard card business.

Holders of premium cards tend to have higher incomes, use their cards more often and have higher balances. They also pay their bills more reliably.

In addition, MBNA specializes in marketing credit cards to affinity groups, including professional, fraternal and educational groups. MBNA cards have been endorsed by 1,367 organizations, including 223 medical and 70 bar associations, which have about 77 million members.

MBNA also has agreements with 630 financial institutions, which have another 12 million potential customers.

The company's profits have been growing rapidly -- at about 17 percent a year during the past four years. The company earned $129 million in 1990, a 22 percent increase over 1989.

But while analysts have high praise for MBNA's winning ways, they are worried that a recession could lower MBNA profits in 1991. And that, of course, could put pressure on the stock.

Anthony R. Davis, analyst at Wheat, First Securities Inc. of Richmond said, "I think that in the longer-term, the credit card business is a growth business. And {MBNA} is going to be the Cadillac issue to play."

But in the shorter term he is concerned about the recession. In a recession, he notes, the number of people who can't pay their credit card balances tends to increase sharply and thus MBNA's losses could grow.

He is also worried, he said, by a change in the card mix at MBNA toward a higher percentage of standard cards, which are less profitable than the premium cards.

Analyst John A. Bailey at Ferris, Baker Watts in Washington also thinks the shares are a good long-term value.

"I think it is a steal for the stockholders in MBNA," he said.

But he, too, believes that MBNA will be hurt by the recession, that profits will slide. "This means a potential for weakness in the stock," he said.

One other factor that will affect the future of MBNA is the growth of competition in the credit card business.

Robert B. McKinley of RAM Research in Frederick, Md., noted that AT&T had distributed 5 million cards in less than a year. American Express, he said, is getting ready to do mass marketing on its Optima card. And the Japanese Credit Bureau is planning to issue its JCB cards next year.

And while MBNA does, indeed, have one of the best portfolios in the country, McKinley said, the credit card business could get very tough in the years to come.