Wells Fargo plans 0.25% notes optionally exchangeable for Kinder Morgan

By Susanna Moon

Chicago, June 15 – Wells Fargo & Co. plans to price 0.25% optionally exchangeable securities due June 2022 exchangeable for the class P common stock of Kinder Morgan, Inc., according to a 424B2 filing with the Securities and Exchange Commission.

Interest is payable semiannually.

Each note has a principal amount of $1,000.

Beginning July, investors may exchange their notes for a number of Kinder Morgan shares equal to the exchange ratio, which will equal initial parity divided by the initial share price. The issuer has the option to settle exchanges in cash instead of shares.

Wells Fargo will set initial parity on the pricing date. It will be less than $1,000. On subsequent days, parity will equal the exchange ratio multiplied by the closing share price on that day.

The notes will be callable beginning June 2018. The redemption amount will be the greater of par and parity.

The payout at maturity will be the greater of par and parity.

Wells Fargo Securities LLC is the underwriter.

The notes will price and settle in June.

The Cusip number is 94986RXR7.

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