By Ronda Fears
Nashville, April 9 - Wells Fargo & Co. sold $3 billion of 30-year convertible floaters at par to yield 3-month Libor minus 25 basis points with a 110.75% conversion premium in the Rule 144A market, via joint bookrunning lead managers Merrill Lynch & Co., Morgan Stanley and Goldman Sachs & Co.
The issue provides for a conversion ratio adjustment if the stock at conversion is between $100 and $150 that adds up to 33.5 calls struck at $100 plus the 10 shares per bond, but caps the conversion ratio at 21.0748.
If after five years, Wells Fargo shares remain below $100, the bonds may be remarketed as zero-coupon straight debt.
There also is a contingent interest trigger if Wells Fargo senior credit is downgraded below A1 by Moody's or below A- by S&P, or if the bond's trading price is less than 98% of parity.
Wells Fargo said it expects to use proceeds for general corporate purposes, including possible repurchases of debt and equity.
Terms of the deal are:
Issuer: Wells Fargo & Co.
| Issue: | Convertible senior floating-rate notes
|
| Bookrunners: | Merrill Lynch (structuring agent), Morgan Stanley (structuring agent) and Goldman Sachs
|
| Amount | $3 billion
|
| Greenshoe: | $450 million
|
| Maturity: | April 14, 2033
|
| Coupon: | 3-month Libor minus 25 basis points for five years
|
| Price: | Par
|
| Yield to maturity: | 3-month Libor minus 25 basis points
|
| Conversion premium: | 110.75%
|
| Conversion price: | $100
|
| Conversion ratio: | 10
|
| Call: | Non-callable for 5 years
|
| Put: | In years 5, 10, 15, 20 and 25
|
| Contingent conversion: | 120%
|
| Contingent payment: | 120%
|
| Settlement: | April 14
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