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Wells Fargo and Company Sells a Large Preferred Offering

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Giant banker Wells Fargo and Company (NYSE:WFC) has sold a new preferred stock offering and as has become typical with the large U.S banking companies it is a huge issue, with a total of 46,000,000 $25 shares being offered.

The new issue carries a coupon of 5.50% which is too low to garner our interest, but for those looking for a solid, investment grade security these may fit the bill.  Shares are rated BBB by Standard and Poor’s and Baa3 by Moodys.

Wells Fargo will now have 10 $25/share issues outstanding and a potential investor can compare all of the outstanding issues on our “swaps” page , which lays out the available issue in a manner where you can easily compare current yields.

The terms of the offering are the typical preferred stock terms, being redeemable in about 5 years (at the issuer’s option) and being a banking company shares are required to be non-cumulative in respect to dividends.

The proceeds from this offering will be used for general corporate purposes, which means that the company can use the proceeds for any purpose they deem necessary.

New shares are now trading on the OTC Grey market under the temporary ticker symbol of WLLPP.  You can read our Grey Market primer if you are not familiar with how Grey Market trading works.  Shares are currently trading in the $25.10/share area.

Details of this issue can be found here.

 

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