Something we all now have in common: we own shares of Wells Fargo

We doubt there are many U.S. followers of Docu-Drama who aren’t invested in at least some Bay Area companies, if only through holdings in an S&P500 index fund. But if there were before today, there aren’t any now.

That’s because Wells Fargo, the San Francisco-based banking giant, announced Wednesday that it had issued to the U.S. Department of the Treasury 25,000 shares of its “Fixed Rate Cumulative Perpetual Preferred Stock, Series D.” Price per share: $1 million, making for a total investment of $25 billion.

The preferred shares pay cumulative dividends of five percent a year for the first five years and nine percent a year thereafter. As part of its purchase of the preferred securities, Treasury also got warrants to purchase 110,261,688 shares of Wells Fargo’s common stock at an initial per-share exercise price of $34.01.The warrants expire after ten years.

The investment is part of Treasury’s Troubled Asset Relief Program (TARP) Capital Purchase Program, under which the Treasury Department “is authorized to use appropriated funds under the Emergency Economic Stabilization Act of 2008 to invest in U.S. financial institutions to encourage financing for U.S. businesses and consumers and to support the U.S. economy.”

Wells Fargo was among the first nine large financial institutions to participate in the Treasury Department’s capital purchase program. The money will help Wells Fargo raise up to $20 billion that the bank says will help enable it to acquire Wachovia.

Wells Fargo closed its release with the observation that it is “the only bank in the U.S. and one of only two banks worldwide to have the highest possible credit rating from both Moody’a Investors and Standar & Poors.


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