Wells Fargo plans to issue new notes due 2024, 2044 in exchange offers

By Susanna Moon

Chicago, Nov. 6 - Wells Fargo & Co. said it began two separate private exchange offers for outstanding subordinated notes.

The company will issue new subordinated notes due Jan. 16, 2024 in exchange for notes issued by Wells Fargo and new subordinated notes due Jan. 15, 2044 for notes issued by Wells Fargo Bank, NA, according to a press release.

The exchange offers will end at 11:59 p.m. ET on Dec. 5.

Tendered notes may be withdrawn until 5 p.m. ET on Nov. 20.

Pricing for each $1,000 principal amount will be set at 11 a.m. ET on Nov. 21 using a reference security plus a fixed spread.

Pricing for the new 2024 notes will be the bid-side yield on the 2.5% U.S. Treasury note due Aug. 15, 2023 plus 170 basis points. Pricing for the new 2044 notes will be the bid-side yield on the 3.625% U.S. Treasury bond due Aug. 15, 2043 plus 170 bps.

The bonds issued by Wells Fargo are as follows:

• $900 million 4.875% subordinated notes due Feb. 15, 2014 with pricing set using the 1.25% Treasury note due Feb. 15, 2014 plus 0 bps, for a hypothetical price of $1,010.51;

• $500 million 4.625% subordinated notes due April 15, 2014 based on the 1.25% Treasury note due April 15, 2014 plus 0 bps, for a hypothetical price of $1,017.42;

• $400 million 5.8% subordinated notes due June 15, 2014 based on the 0.75% Treasury note due June 15, 2014 plus 0 bps, for a hypothetical price of $1,031.39;

• $1.5 billion 5.25% subordinated notes due Aug. 1, 2014 based on the 0.125% Treasury note due July 31, 2014 plus 5 bps, for a hypothetical price of $1,034.61;

• $850 million 5% subordinated notes due Nov. 15, 2014 based on the 0.375% Treasury note due Nov. 15, 2014 plus 10 bps, for a hypothetical price of $1,045.96;

• $850 million 5.125% subordinated notes due Sept. 15, 2016 based on the 0.625% Treasury note due Oct. 15, 2016 plus 40 bps, for a hypothetical price of $1,114.01; and

• $1.25 billion 5.625% subordinated notes due Oct. 15, 2016 based on the 0.625% Treasury note due Oct. 15, 2016 plus 40 bps, for a hypothetical price of $1,131.55.

The bonds issued by Wells Fargo Bank are as follows:

• $149.7 million 6.18% subordinated notes due Feb. 15, 2036 based on the 3.625% Treasury bond due Aug. 15, 2043 plus 100 bps, for a hypothetical price of $1,196.89;

• $150 million 6.18% subordinated notes due Feb. 15, 2036 based on the 3.625% Treasury bond due Aug. 15, 2043 plus 100 bps, for a hypothetical price of $1,196.89;

• $1 billion 5.95% subordinated notes due Aug. 26, 2036 based on the 3.625% Treasury bond due Aug. 15, 2043 plus 100 bps, for a hypothetical price of $1,167.72;

• $50 million 6.919% subordinated notes due Dec. 15, 2036 based on the 3.625% Treasury bond due Aug. 15, 2043 plus 100 bps, for a hypothetical price of $1,304.05;

• $1.5 billion 5.85% subordinated notes due Feb. 1, 2037 based on the 3.625% Treasury bond due Aug. 15, 2043 plus 100 bps, for a hypothetical purchase price of $1,155.51, consisting of $100 in cash and $1,055.51 exchange value; and

• $2.5 billion 6.6% subordinated notes due Jan. 15, 2038 based on the 3.625% Treasury bond due Aug. 15, 2043 plus 100 bps, for a hypothetical purchase price of $1,266.17, consisting of $100 in cash and $1,166.17 exchange value.

The hypothetical purchase price is the total payment per $1,000 principal amount of notes tendered by 5 p.m. ET on Nov. 20, the early tender date, and includes an early exchange premium of $30.00.

Each exchange offer is conditioned on a minimum of $500 million aggregate principal amount of new notes of the relevant series being issued in exchange for tendered notes.

The financial services company is based in San Francisco.

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