SYDNEY, Apr 21 (IFR) - Asian and Australian investors purchased the
vast majority of Wells Fargo & Company'sA$1.2bn triple-tranche SEC-registered
global bonds issued on Wednesday.
Only 3% of the notes went to American investors as Asians took
49%, Australians 40%, while Europeans got 8%.
A A$550m five-year floating-rate note priced 110bp wide of three-month
BBSW, the A$400m 3.25% April 27 2022s priced at 99.943 to yield 3.2625%, 123bp
over ACGBs and the A$250m 4.0% 10-year priced at 99.877 for a yield of
4.015%, equivalent to ACGBs plus 156.5bp.
Asia bought 60% of the five-year floater, 30% of the fixed-rate five-year and
53% of the 10-year. Australia's respective allocations were 30%, 53% and 42%,
Europe's were 10%, 7% and 4% and those of the US 0%, 10% and 0%.
Asset managers and insurance companies took 3% of the floater, 61% of the
five-year fixed and 47% of the 10-year for an overall 44% allotment. Banks
bought 61%, 28% and 37%, respectively for a 45% total share. Middle market and
private banks purchased 8%, 5% and 13% (8% overall), while other investors'
respective shares were 1%, 6% and 3% or 3% in total.
The A$1.2bn global trade was A2/A/AA- rated Wells Fargo's second sale of Aussie
dollar senior global bonds and the fifth such issuance of US banks. ANZ, CBA, TD
Securities and Wells Fargo Securities were joint lead managers.
Last year, Wells Fargo, Bank of America and Citigroup issued Australian dollar
global bonds totalling A$3.7bn in four trades as US banks halted Kangaroo
Low US take-ups are one reason behind Goldman Sachs Group's decision to access
Australian dollar funding via the first "modified" TLAC-compliant Kangaroo
bonds, which are subject to New York rather than New South Wales law.
Like Aussie dollar global bonds, the new seven-year notes, pricing later today
under Goldman's Australian dollar MTN programme, are ineligible for the Aussie
dollar Bloomberg bond index, but, unlike globals, they settle in Austraclear and
have an Australian ISIN.
The new notes cannot be distributed in the US, but are more appealing than
global bonds to Australians, particularly non-index investors.
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