Wells Fargo sells upsized $1 billion of preferred stock; Validus gets temporary ticker

By Stephanie N. Rotondo

Seattle, June 8 – The preferred stock new issue calendar continued to build on Wednesday, as Wells Fargo & Co. announced a sale of at least $250 million series X class A noncumulative perpetual preferred shares. The issue eventually came well upsized at $1 billion, priced at par to yield 5.5%.

“It’s a good time to raise capital,” a trader said. “Especially if they make things more stringent for banks, it’s good to have more cash on hand.”

Post-pricing, a trader pegged the new issue at $24.92 bid, $24.94 offered.

The trader saw the paper at $24.88 bid, $24.92 offered in the early gray market.

In response to the new issue, the bank’s 5.7% series W class A noncumulative perpetual preferreds (NYSE: WFCPW) were trading off 16 cents to $25.64. The 8% series J class A noncumulative perpetual preferreds (NYSE: WFCPJ) dropped 27 cents, or nearly 1%, to $27.51.

Price talk on the new issue was in the 5.625% area, a market source said.

Wells Fargo Securities LLC was the bookrunner.

Proceeds will be used for general corporate purposes.

Meanwhile, from Tuesday’s business, Maiden Holdings Ltd.’s $110 million of 6.625% $25-par notes due 2046 had not yet freed to trade as of mid-morning, according to a trader.

He pegged the issue at $24.80 bid, $24.85 offered.

Validus Holdings Ltd.’s $150 million of 5.875% series A noncumulative preference shares – a deal priced Monday – were then seen at $24.88 bid, $24.90 offered early in the day. Paper closed at $24.89, which was up 4 cents from the previous session but down from opening levels of $24.97.

The issue is trading under a temporary symbol, “VRHSP.”

It was also reported Wednesday that NextEra Energy Capital Holdings Inc.’s 5.25% $25-par series K junior subordinated debentures due June 1, 2076 will begin trading on the New York Stock Exchange on Thursday under the ticker “NEEPK.”

That issue came May 31. On Tuesday, the company said $70 million of its $75 million greenshoe had been exercised, bringing the total outstanding principal amount to $570 million.

A trader said the debentures were trading “around par” at mid-morning.

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