Wachovia upsizes issue, Wells Fargo prices $2 billion in notes on continued high grade stability

By Andrea Heisinger

Omaha, Aug. 15 - A $250 million issue of floaters from Wachovia Corp. was doubled to $500 million Wednesday, while Wells Fargo & Co. priced a $2 billion deal of floaters.

The new issue from Wells Fargo priced at par with a coupon of three-month Libor plus 22 basis points.

Agents were Citigroup Global Markets Inc., Goldman Sachs & Co. and Wells Fargo Brokerage Services, LLC.

Wachovia's notes were priced at the Fed Funds open plus 30 bps, with terms originally being set on Tuesday.

An announcement of a future deal was made involving Westar Energy Inc. subsidiary Kansas Gas and Electric Co. and Nomura International plc.

The deal is expected to be for $175 million in 6.53% 30-year first mortgage bonds, with the private placement taking place between Oct. 15 and Dec. 31.

Some overnight volatility affected trading Wednesday, according to a market source, who said that by Wednesday morning things had calmed down.

"There is continued leaking in corporate spreads, and some pretty dramatic leaking in secondary corporate spreads," one trader said.

This led to some issuers being off a couple of basis points, they added.

But Tuesday's $500 million, two-tranche issue for Appalachian Power Co. continued the recent trend of bonds trading tighter than what they priced at.

The $250 million tranche of 6.70% senior notes priced at a spread of 170 bps and was trading at 169 bps Wednesday. The $250 million tranche of 5.65% senior notes priced at 119 bps and was trading at 117 bps.

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