Month: October 2020

UPDATE–the OTC ticker is WFCCL

Banker Wells Fargo & Company (WFC) has priced their new issue of preferred right about where it was predicted to price–4.70%.

The issue is a giant issue with 46.8 million shares being sold (no over allotment). No doubt they will be redeeming the WFC-T 6% issue with part of the proceeds (there are 28 million shares outstanding of this issue)–then we will see what other issue they move on after the ‘T’ issue.

The issue will trade OTC grey market tomorrow (Thursday), but the OTC temporary ticker has not yet been posted as of 5:45 pm (central).

Please note that this issue is rated investment grade by Moody’s only. All WFC preferreds were rated BB+ by Standard and Poor’s on 9/25/2020.

The pricing term sheet can be read here.

Giant Banker Wells Fargo & Company (WFC) has announced they will be selling a new $25 preferred stock issue.

Nothing unusual about this issue–it will be non-cumulative, qualified and optionally redeemable in 2025.

The banker includes ‘redemption of preferred shares’ in their ‘use of proceeds’ section of the prospectus. The company has 3-4 issues that are currently (or soon will be) redeemable at coupons ranging from 5.125% to 6.0%. With ‘yield talk’ in the 4.75% area it is highly likely the 6.0% WFC-T issue will be redeemed and potentially the 6% WRC-V issue which becomes redeemable on 12/15/2020 will be called–note that all WFC issues can only be redeeemed on a dividend payment date of which the next is 12/15/2020.

All their many issues can be seen here.

The permanent ticker will be WFC-A when it hits the NYSE and will trade on the OTC grey market prior to the permanent exchange, but the OTC grey market ticker has not yet been announced.

The preliminary prospectus can be found here.

Eugene was right on this one.

As expected U.S. Bancorp (UBS) priced a new issue of perpetual preferred stock with a very low coupon.

The issue priced with a coupon of 3.75%–even lower than the ‘yield talk’–which has become the norm lately. This is NOT the lowest coupon preferred the bank has outstanding as they have a $25 floater with a 3.50% minimum — USB-H which can be seen here.

The issue is non-cumulative and investment grade–and of course qualified for a lower tax rate.

Below you can see the details of the new issue from U.S. Bancorp.

The pricing term sheet can be read here.

US Bancorp (USB) will be selling a new preferred stock issue.

This highly rated bank will likely garner a A3 from Moody’s and BBB from Standard and Poor’s which is where there current issues outstanding are rated.

You can see the current issues outstanding here. The company has a 5.15% issue which is now redeemable (USB-O) which will likely be redeemed with the proceeds from the new issue–shares today in the ‘O’ are taking a shellacking–down 3-4%.

Yield talk is in the 4% area–plus or minus an 1/8% (more likely minus 1/8%)

The preliminary prospectus can be read here.

mcg was right on this one.

Nearly 3 years after the initial launch (in 1/2018) Gladstone Land (LAND) has listed their 6% perpetual preferred stock under ticker LANDO.

The issue began to trade today and closed the day at $23.99. After trading in the $25/share area at the open today a big ‘dump’ came midday and large orders throughout the afternoon continued as holders decided it was time to exit. Holders of the shares, which previously had no exchange trading, were able to tender shares back shares previously at $23.50–so of course a premium today looked good to them.

Gladstone Land had initially offered these shares in 1/2018 acting as their own underwriter. When 6 million shares were sold the promise was to list the shares and they had sold near 6 million by 3/9/2020.

These shares will have an optional redemption period starting 6/1/2022. This is a monthly payor–which we always like.

I caution folks to not compare these to LANDP which is a 6.375% TERM preferred with a mandatory redemption on 9/30/2021. Being a term preferred the share price has a floor and is not likely to trade under $25/share prior to redemption.

Folks have been discussing this issue on the reader alerts page today if you want some opinions on the issue you can get them here.

The detail on the issue is here.

The initial prospectus can be read here.

Closed end fund RiverNorth/DoubleLine Strategic Opportunity Fund (OPP) has priced the previously announced new preferred stock offering.

The issue priced with a coupon of 4.375%–pretty darned tasty for a A1 rated issue. This will be a ‘hot’ issue come Monday morning.

The terms are fairly standard for a perpetual preferred–optionally redeemable in about 5 years, cumulative, potentially qualified dividends (but can vary from year to year).

The issue will trade Monday morning under OTC temporary ticker OPPRP.

The pricing term sheet can be found here.