Midday Commentary: Wells Fargo plans new preferreds; SL Green frees up; Winthrop listing soon

By Stephanie N. Rotondo

Phoenix, Aug. 9 - Rumors circulating the previous session about a large new $25-par deal might have proved true Thursday as Wells Fargo & Co. announced plans to sell at least $250 million of class A noncumulative perpetual preferreds, series N.

Price talk was originally 5.375% to 5.5%, a trader said. However, it was then revised to 5.2%, he said, opining that greater-than-expected demand was the cause. He added that because of the demand, "they're probably looking to grow it as much as they can."

He said the issue was already trading around par in the gray market at midday.

The shares will be sold as depositary shares representing a 1/1,000th interest in each full share.

San Francisco-based Wells Fargo Securities LLC is the bookrunner. Bank of America Merrill Lynch, Morgan Stanley & Co. LLC and UBS Securities LLC are the joint lead managers.

There is no selling group, according to a trader. Pricing is expected Friday.

Proceeds will be used for general corporate purposes, including investments in or advances to existing or future subsidiaries; repayment of obligations that have matured; and reducing outstanding commercial paper and other debt.

In recent deals, a trader said SL Green Realty Corp.'s $200 million offering of 6.5% series I cumulative redeemable perpetual preferred shares freed from the syndicate Wednesday night.

The deal priced Tuesday.

Paper was trading at $24.92, a trader reported.

Also, Winthrop Realty Trust's new $75 million of 7.75% senior notes due Aug. 15, 2022 could list early next week, a trader said. The issue has already been assigned a reporting symbol - "MGR," according to the trader - which he said usually indicates that official listing is right around the corner.

The deal priced Wednesday. A trader said the notes were trading at $25.15 on Thursday.

The deal came in line with talk and was upsized from $35 million. There is an $11.25 million over-allotment option.

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