Wells Fargo prices offer to swap out 13 note series, takes early count

By Susanna Moon

Chicago, Nov. 21 - Wells Fargo & Co. announced the early tender results in the two separate private exchange offers for outstanding subordinated notes, which priced later on Thursday.

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.

Interest on the new 2024 notes will be 4.48%, set using the bid-side yield on the 2.5% U.S. Treasury note due Aug. 15, 2023, which was 2.78%, according to a company press release.

Interest on the new 2044 notes was set at 5.606% using the bid-side yield on the 3.625% U.S. Treasury note due Aug. 15, 2043, which was 3.906%.

Pricing for the new 2024 notes was the bid-side yield on the 2.5% U.S. Treasury note due Aug. 15, 2023 plus 170 basis points, as previously reported. 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.

Tendered notes so far

The amount of notes tendered by the early tender deadline, 5 p.m. ET on Nov. 20, satisfies the minimum offer condition for each series of new notes to be issued, according to a press release.

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

The exchange offers will end at 11:59 p.m. ET on Dec. 5. The offers began Nov. 6.

Tendered notes may no longer be withdrawn, as of the early tender deadline.

The breakdown for the tendered bonds issued by Wells Fargo is as follows:

• $69,904,000 of the $900 million 4.875% subordinated notes due Feb. 15, 2014;

• $36,912,000 of the $500 million 4.625% subordinated notes due April 15, 2014;

• $5,676,000 of the $400 million 5.8% subordinated notes due June 15, 2014;

• $181,028,000 of the $1.5 billion 5.25% subordinated notes due Aug. 1, 2014;

• $54,149,000 of the $850 million 5% subordinated notes due Nov. 15, 2014;

• $81,456,000 of the $850 million 5.125% subordinated notes due Sept. 15, 2016; and

• $221,535,000 of the $1.25 billion 5.625% subordinated notes due Oct. 15, 2016.

The breakdown for the tendered bonds issued by Wells Fargo Bank is as follows:

• $99,918,000 of the $149.7 million 6.18% subordinated notes due Feb. 15, 2036;

• $67,955,000 of the $150 million 6.18% subordinated notes due Feb. 15, 2036;

• $337,459,000 of the $1 billion 5.95% subordinated notes due Aug. 26, 2036;

• $38,206,000 of the $50 million 6.919% subordinated notes due Dec. 15, 2036;

• $509,052,000 of the $1.5 billion 5.85% subordinated notes due Feb. 1, 2037; and

• $1,086,367,000 of the $2.5 billion 6.6% subordinated notes due Jan. 15, 2038.

Pricing details

The total purchase price for each $1,000 principal amount was set at 11 a.m. ET on Nov. 21 using a reference security plus a fixed spread.

The purchase price for the bonds issued by Wells Fargo were based on reference security and fixed spread as follows:

• 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 reference yield of 0.099%, an exchange offer yield of 0.099% and a total purchase price of $1,010.51;

• 4.625% subordinated notes due April 15, 2014 based on the 1.25% Treasury note due April 15, 2014 plus 0 bps, for a reference yield of 0.114%, an exchange offer yield of 0.114% and a total purchase price of $1,017.41;

• 5.8% subordinated notes due June 15, 2014 based on the 0.75% Treasury note due June 15, 2014 plus 0 bps, for a reference yield of 0.125%, an exchange offer yield of 0.125% and a total purchase price of $1,031.35;

• 5.25% subordinated notes due Aug. 1, 2014 based on the 0.125% Treasury note due July 31, 2014 plus 5 bps, for a reference yield of 0.136%, an exchange offer yield of 0.186% and a total purchase price of $1,034.42;

• 5% subordinated notes due Nov. 15, 2014 based on the 0.375% Treasury note due Nov. 15, 2014 plus 10 bps, for a reference yield of 0.148%, an exchange offer yield of 0.248% and a total purchase price of $1,045.98;

• 5.125% subordinated notes due Sept. 15, 2016 based on the 0.625% Treasury note due Oct. 15, 2016 plus 40 bps, for a reference yield of 0.527%, an exchange offer yield of 0.927% and a total purchase price of $1,115.87; and

• 5.625% subordinated notes due Oct. 15, 2016 based on the 0.625% Treasury note due Oct. 15, 2016 plus 40 bps, for a reference yield of 0.527%, an exchange offer yield of 0.927% and a total purchase price of $1,133.48.

The total purchase price includes an early exchange premium of $30.00 per $1,000 principal amount of notes tendered by the early tender deadline.

More pricing details

The purchase price for each $1,000 par amount of bonds issued by Wells Fargo Bank were based on a reference security and fixed spread as follows:

• 6.18% subordinated notes due Feb. 15, 2036 based on the 3.625% Treasury bond due Aug. 15, 2043 plus 100 bps, for a reference yield of 3.906%, an exchange offer yield of 4.906% and a total purchase price of $1,171.13;

• 6.18% subordinated notes due Feb. 15, 2036 based on the 3.625% Treasury bond due Aug. 15, 2043 plus 100 bps, for a reference yield of 3.906%, an exchange offer yield of 4.906% and a total purchase price of $1,171.13;

• 5.95% subordinated notes due Aug. 26, 2036 based on the 3.625% Treasury bond due Aug. 15, 2043 plus 100 bps, for a reference yield of 3.906%, an exchange offer yield of 4.906% and a total purchase price of $1,142.06;

• 6.919% subordinated notes due Dec. 15, 2036 based on the 3.625% Treasury bond due Aug. 15, 2043 plus 100 bps, for a reference yield of 3.906%, an exchange offer yield of 4.906% and a total purchase price of $1,276.04;

• 5.85% subordinated notes due Feb. 1, 2037 based on the 3.625% Treasury bond due Aug. 15, 2043 plus 100 bps, for a reference yield of 3.906%, an exchange offer yield of 4.906% and a total purchase purchase price of $1,129.77, consisting of $100 in cash and $1,029.77 exchange value; and

• 6.6% subordinated notes due Jan. 15, 2038 based on the 3.625% Treasury bond due Aug. 15, 2043 plus 100 bps, for a reference yield of 3.906%, an exchange offer yield of 4.906% and a total purchase purchase price of $1,208.03, consisting of $100 in cash and $1,138.03 exchange value.

The total purchase price includes an early exchange premium of $30.00 per $1,000 principal amount of notes tendered by the early tender deadline.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.