Wells Fargo Announces Transition for Outstanding LIBOR-Linked Instruments
MAY 15, 2023 - 6:47 am
Wells Fargo issued debt securities, certificates of deposit, trust preferred securities and preferred stock and related depositary shares that reference the London Interbank Offered Rate (LIBOR) for deposits in U.S. dollars for a three-month tenor.
Debt Securities, Certificates of Deposit and Trust Preferred Securities
In accordance with the Adjustable Interest Rate Act and the final rule adopted by the Federal Reserve and the terms of such instruments, as applicable, after June 30, three-month USD LIBOR in applicable debt securities, certificates of deposit and trust preferred securities will be replaced with the CME term SOFR reference rate published for a three-month tenor plus a spread adjustment of 0.26161%. The replacement of three-month USD LIBOR with three-month CME term SOFR plus the spread adjustment will be effective for determinations made under the terms of the specified instruments after June 30. Additional information regarding the specified instruments will be made available through the LIBOR Benchmark Replacement Index solution through the DTCC’s legal notice system.
Preferred Stock and Related Depositary Shares
Each series of Wells Fargo’s fixed-to-floating rate non-cumulative perpetual Class A preferred stock is governed by the terms of a certificate of designation and will not transition to three-month CME Term SOFR by operation of law or otherwise. The certificate for each series specifically defines three-month LIBOR to be a set rate as shown for each series in the table below for a dividend period beginning on the date as shown for each series in the table below if three-month LIBOR cannot otherwise be determined as provided in the applicable certificate. In accordance with this definition of three-month LIBOR, the dividend rate that will apply to any dividend payment date occurring after the applicable commencement date will be an annual rate equal to the set rate plus the spread set forth in the certificate for each series.
Fixed-to-Floating Rate Non-Cumulative Perpetual Class A Preferred Stock
Set Rate (which is equal to the dividend rate preceding the commencement date)
Dividend Rate Following Commencement Date
Sept. 15, 2023
5.85% + 3.09%
March 15, 2024
6.625% + 3.69%
June 15, 2024
5.9% + 3.11%
June 15, 2025
5.875% + 3.99%
The cessation of three-month LIBOR has no further impact on the terms of the fixed-to-floating rate non-cumulative perpetual Class A preferred stock.
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