Wells Fargo ups tender cap in oversubscribed offer, details pricing

By Susanna Moon

Chicago, June 13 - Wells Fargo & Co. and Wells Fargo Bank, NA said investors tendered $2,586,347,000 of nine series of subordinated notes by the early deadline of 5 p.m. ET on June 12.

The companies are now offering to tender for up to $2.2 billion of the notes, up from $2 billion, according to a press release.

The tender offer cap was raised to $350 million from $225 million for the floaters due 2016, to $515 million from $375 million for the 4.75% notes due 2015 and to $370 million from $240 million for the 4.875% notes due 2015.

Pricing for the offer was based on the yield of a reference Treasury security plus a spread at 2 p.m. ET on June 12. The purchase prices were fixed for the floaters.

The breakdown is provided in order of the notes' acceptance priority levels.

For Wells Fargo Bank's eight series of notes, the total purchase price for each $1,000 principal amount, set using the bid-side price of the reference Treasuries, are as follows:

• $1,122.97 for up to $300 million of the $750 million of 5.6% subordinated notes due 2016, based on the 0.625% Treasury notes due May 31, 2017 plus a spread of 140 basis points, with a reference yield of 0.737%;

• $1,131.93 for up to $350 million of the $1 billion of 5.75% subordinated notes due 2016, based on 0.625% Treasury notes due May 31, 2017 plus a spread of 145 bps, with a reference yield of 0.737%;

• $962.50 for up to $350 million of the $669,988,000 of floating-rate subordinated notes due 2016;

• $1,095.43 for up to $150 million of the $500 million of 5% subordinated notes due 2015, based on 0.25% Treasury notes due May 15, 2015 plus a spread of 145 bps, with a reference yield of 0.398%;

• $1,076.36 for up to $515 million of the $1.5 billion of 4.75% subordinated notes due 2015, based on 0.25% Treasury notes due May 15, 2015 plus a spread of 135 bps, with a reference yield of 0.398%;

• $1,078.88 for up to $370 million of the $1.2 billion of 4.875% subordinated notes due 2015, based on 0.25% Treasury notes due May 15, 2015 plus a spread of 135 bps, with a reference yield of 0.398%;

• $985.71 for up to $75 million of the $706 million of floating-rate subordinated notes due 2014; and

• $1,072.28 for up to $75 million of the $750 million of 4.8% subordinated notes due 2014, based on 0.25% Treasury notes due May 31, 2014 plus a spread of 135 bps, with a reference yield of 0.290%.

The total purchase price is $1,049.68 for each $1,000 principal amount in the offer for up to $400 million of Wells Fargo's $1 billion of 4.95% subordinated notes due 2013. The price was set using the 0.25% Treasury notes due May 31, 2014 plus a spread of 80 bps, with a reference yield of 0.290%.

In each case, the total payment includes an early tender payment of $30.00 per $1,000 of notes tendered by the early deadline.

Wells Fargo Bank's 5.6% notes were originally issued by Wachovia Bank, NA and later assumed by Wells Fargo Bank.

As the offer has been oversubscribed, the companies will purchase the notes on a prorated basis according to the acceptance priority level.

The tender offer will continue until midnight ET on June 26. Holders may no longer withdraw tendered notes.

Wells Fargo will also pay accrued interest up to but excluding the settlement date, which is expected to be June 28.

The offer began May 30.

The offers are not conditioned on a minimum amount of notes being tendered nor on one another. The amounts of each note series accepted for purchase may be prorated.

The dealer manager is Wells Fargo Securities, LLC (866 309-6316 or 704 715-8341). The information agent is D.F. King & Co., Inc. (800 949-2583 or 212 269-5550).

Wells Fargo is a financial services company based in San Francisco.

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