Midday Commentary: Wells Fargo new issue frees, heads up; UBS prices $1,000-par hybrid notes

By Stephanie N. Rotondo

Phoenix, Aug. 10 - The preferred stock market was treading water Friday, a trader said at midday.

"We've been on a nice run," he said. In Friday trading, however, "nothing's up or down. Nobody cares. Everybody's taking a three-day weekend."

Wells Fargo & Co.'s new $675 million of 5.2% class A noncumulative perpetual preferreds, series N, freed from the syndicate Friday morning, according to a trader.

The deal priced Thursday.

"It was really active right after it freed," he said, but then things quieted down.

He saw the issue trade as high as $25.17 before coming back in to $25.10.

Meanwhile, UBS AG priced $2 billion 7.625% $1,000-par U.S. dollar-denominated hybrid capital bonds, a market source told Prospect News on Friday.

Talk was originally around 8%, the source said.

"The issue has been trading up," the source said, seeing a high of 102 before the notes "eased off" to 101 5/8, "which is still very good."

The deal includes a loss absorption mechanism, in which the face value of the issue can be written down to zero if the capital thresholds fall below 5%.

Settlement is expected by Aug. 17.

UBS Securities LLC is the lead arranger. Joint bookrunners are Barclays plc, Citigroup Global Markets Inc., Goldman Sachs, J.P. Morgan Securities LLC, Morgan Stanley & Co., RBS Securities Inc. and Wells Fargo Securities LLC.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.