Wells Fargo & Co Prices Preferred Issue

Wells Fargo & Co (WFC) has priced the previously announced new preferred stock.

The company will sell 70 million shares with a coupon of 4.75%. There will be 10.5 million shares available for over allotment.

The issue will be investment grade, non-cumulative and qualified.

The issue will trade immediately on the OTC Grey market.

The pricing term sheet can be read here.

29 thoughts on “Wells Fargo & Co Prices Preferred Issue”

  1. TDA shows this as an ADR???? That doesn’t seem to make any sense… Maybe I don’t know what an ADR is, but investopedia says, “What Is an American Depositary Receipt – ADR?

    An American depositary receipt (ADR) is a negotiable certificate issued by a U.S. depository bank representing a specified number of shares—or as little as one share—investment in a foreign company’s stock. The ADR trades on markets in the U.S. as any stock would trade.”

    Is Wells Fargo a foreign company?

    1. Only if California isn’t a state anymore 🙂 I wouldn’t trust the you see at your brokerage for early issues like this

      1. I didn’t check every single issue, but every one that I did check shows they are ADR’s.

        Is that just a mistake by TDA? Does anyone actually know if TDA actually charges ADR fees for these issues?

  2. WFCZL is the subject of a corporate action tomorrow, the 17th. Should mean it goes to its permanent ticker.

    Hopefully, it will jump 25 cents so I can unload the shares I bought for a flip.

    Praise be to Vanguard for actually getting the issue up ahead of market opening this morning. Maybe all those tung lashings I gave your reps had an impact.

    Almost embarrassed to be doing such things but lots of cash and few opps. The Canadians have been bid up so much in the last month I’m just watching from the sidelines now (1 exception).

    1. Bob-in-DE—I also picked up a position for a couple steak dinners flip. Might do the same with Triton tomorrow, although 6.875% is pretty meager, might have to wait a day or two–would be flip only.

  3. Hated to do it, load up the basket with yet more of the new lowest yielding issues. But I had visions of yet more insulting 4.5% investor grades coming to market and kicking myself not buying in even to flip.

    The other morning, my husband teased me not buying met life which was already at 25.12 since I woke up too late. He said what’s 12 cents. Hah!

    1. Hster–what did he say after it continued up to 25.44? Now it has settle back to 25.30

      1. Tim,
        I am redeeming myself with a load of WFCZLs at par to clear my name.
        I told him I don’t have to jump on every low yielding thing that wags it’s tail.

    2. Hster – Then tell the lazy sod to get up early and do it himself!

      If I said that to my wife she might evict me.

      1. Bob-
        Not my hard working husband! He caught a whole 3 crabs yesterday.

        Don’t get evicted. Happy wife happy life.

    1. Ken; I just looked up your WFC+Y. Trading at $26.51 and callable on 6/15/22. My CPA taught me this old trick many decades ago. Subtract the premium and then check the call date and actually see what your true gain on your money is. Not very good in this case or many many others. Then throw in the fact that many of these issues anymore are “Non-cumulative” and the investor in todays world is getting the proverbial old screw job. You should see what some of my Walmart and Target bonds are trading at that I bought many years ago with a 6.5% coupon. Try over 150!!!!!!!!!!! Crazy.

      1. Chuck – I’d like to hear your CPA explain what he means…….. It sounds as though he’s one of those in the camp that you should never buy a bond or preferred that’s trading at a premium…. That’d sure be a CPA to avoid imho… If I figure correctly, WFC-Y trading at 26.51 today provides a ytc of 3.24% . That’s your worst case scenario and if that should happen you sure get a better yield than if you had put that money into any IG 2 year piece of paper so it looks pretty good. Granted it’s not good vs your current yield if it were not callable, but were it not callable you wouldn’t be able to buy it this cheaply today anyway and the 3.24% is not a locked in yield, It’s only a calculation of the worst scenario that could happen barring BK…

        1. Hello 2whiteroses; I’ll go with your 3.24% to the call. Actually you just kinda proved my whole point. Yes, its better than a CD or a money market. No doubt about it. But he’s (CPA) that wants a much better return than that. He’s actually a pretty smart guy, I’ve known him and used him for 20+ years. He’s just like me as we are just not impressed at all with these types of returns. I have learned that the “environment” that we are in “if you find something you really like and have done your homework and for some reason its priced at a price you can live with then load up and buy a ton”. Because in a week or two it will be bid up to crazy prices. I can give you dozens and dozens of examples as my Preferreds alone are all trading at crazy high premiums.

      2. Chuck, Just food for thought, nothing else. But, I think you are being a bit 2 dimensional in your thoughts. I recently bought more of a ute preferred at $26.35 that term dates in 9/30/23 at $25 par. I will earn 4.4% QDI until maturity despite buying way over par. I doubt one can find a term dated feature from a utility with such terms for a sub 4 year hold. I see people looking for quality 4% short dated preferreds here, but dont see many available as an option. So it depends on what one wants in an investing outcome.
        So as 2WR stated it depends on situation.
        The cumulative and non cumulative is not a real significant debate. Trashy companies essentially can throw the cumulative term in as a freebee. As if it suspends it likely will go down anyways. Companies just dont suspend to screw over holders. Most have financial problems that appear long before a suspension begins. But, certainly job one is for one to buy issues they feel comfortable owning, not what someone else thinks.

        1. Grid – So which ute issue did you buy I say, salivating just a little bit???? u talking CNIGO?

          1. 2WR, You are psychic! Or maybe its just because its the only term dated QDI ute preferred around, lol.. I also this week picked 500 shares of its sister CNIGP at $23.10 (par $20.87 or so). Due to its anytime owner optional conversion of 1.2 CNIG shares, in theory I could immediately convert today at $25 worth of common stock. But they got some interesting stuff going on buying out their partner (that both CEOs are on each others board) that is never fully explained. Since about 11 people own over half of the common (and both preferreds) they are never in any pressure to revel much of anything though but the financials.

            1. Grid – There’s something lovable about a company named Leatherstocking, don’t you think????????? lovable or lovable perhaps in a Village People kind of way……….. lol

              1. Yes Corning bought out the PA side of the joint ownership which is the state they bought Pike Electric. They clearly are expanding out of NY which is not too friendly to gas lines. Mirabito and Corning are forming a partnership in NY. They are almost chummy interlocking directors. Mirabito top execs on Corning board and vice versa. But Micheal German the Corning boss, Gabelli, and a dead businessman’s trust fund hold the power at Corning.

  4. 24.98 purchase at open. I have had good fortune flipping bank issues. See what occurs here.

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