NuStar Energy sells upsized fixed-to-floating preferreds; Wells Fargo lists, drops below par

By Stephanie N. Rotondo

Seattle, April 25 – Buzz regarding a possible new preferred stock deal from a master limited partnership proved true on Tuesday as NuStar Energy LP brought a $350 million offering of 7.625% series B fixed-to-floating rate cumulative redeemable preferred units.

Price talk was initially 7.875% but was later revised to 7.625% to 7.75%.

“I expect them to do a price revision at any time now,” a trader noted ahead of the revision, seeing the paper at $24.95 in the early gray market.

Toward the end of business, the preferred units were pegged in a $25.05 to $25.15 context.

Wells Fargo Securities LLC, BofA Merrill Lynch, Morgan Stanley & Co. LLC and UBS Securities LLC are running the books.

Distributions will be fixed until June 15, 2022, at which point the rate will float at Libor plus 564.3 basis points.

Meanwhile, Wells Fargo & Co.’s $600 million of 5.625% $25-par series Y class A noncumulative perpetual preferred stock began trading on the New York Stock Exchange, as was expected.

The ticker symbol is “WFCPrY.”

Though the issue dominated the session – over 2.79 million of the preferreds changed hands – the paper closed the day under par at $24.96.

The preferreds were seen at $25.08 in early trading, which compared to $25.06 at the open.

The deal priced on April 17. Price talk was 5.875%. The deal was increased from $250 million.

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