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Wells Fargo to offer fixed-rate reset perpetual preferred stock
By Mary-Katherine Stinson
Lexington, Ky., July 17 – Wells Fargo & Co. will offer depository shares of fixed-rate reset non-cumulative perpetual class A preferred stock, series EE, according to a 424B2 filing with the Securities and Exchange Commission.
The stock will have a liquidation preference amount of $25,000 per share, equivalent to $1,000 per depositary share.
Dividends will accrue beginning on Sept. 15 at an initial rate until the first reset date on Sept. 15, 2028 when it will reset to Treasuries plus a margin. Beginning on Dec. 15, 2028, the interest rate will continue to reset every five years.
The five-year treasury rate will be determined on each reset dividend determination date.
The series EE stock may be redeemed at the company’s option in whole, or in part, on Sept. 15, 2028, or on any subsequent dividend payment date at par plus any declared and unpaid dividends without accumulation of any undeclared dividends.
The series EE stock may be redeemed at the company’s option in whole before Sept. 15, 2028 due to a regulatory capital treatment event.
Wells Fargo Securities, LLC is the sole bookrunner.
Richards, Layton & Finger, P.A. will act as special Delaware counsel to Wells Fargo. Faegre Drinker Biddle & Reath LLP will advise Wells Fargo on legal matters relating to the depositary shares. The company will also use in-house counsel.
Gibson, Dunn & Crutcher LLP will work as legal counsel for the underwriter.
Proceeds will be used for general corporate purposes, including, but not limited to, the redemption of some or all of one or more series of the company’s outstanding preferred stock and related depositary shares.
The depositary shares will not be listed on any securities exchange.
The financial services company is based in San Francisco.
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