Wells Fargo Delays Bond Sale After S&P Revises Outlook
October 18 2016 - 9:50PM
Dow Jones News
Wells Fargo & Co. on Tuesday delayed selling a 10-year bond
after S&P Global Ratings revised the outlook on its credit
rating to negative from stable, a person familiar with the matter
said.
It is unusual for investment-grade companies to delay bond sales
but unexpected events can occasionally cause them to happen. The
bond is now expected to price Wednesday, the person said.
In its report Tuesday, S&P affirmed Wells Fargo's single A
rating but downgraded its outlook, noting the hit to the bank's
reputation from the recent disclosure that employees had created as
many as two million accounts without customers' knowledge.
In September, the bank agreed to pay a $185 million fine and
entered into an enforcement action with regulators and a local
official. It also faces investor questions about its business model
given the departure this week of Chief Executive John Stumpf and
changes it already has made to its retail-bank sales goals.
Wells Fargo faces "significant business challenges for at least
several months," S&P said.
The bank's existing 4.1% notes due 2026 last traded at 105.993
to yield 3.365% or 1.62 percentage points above Treasurys,
according to MarketAxess. The yield on the notes was 3.046%, or
1.51 percentage points above Treasurys, on Sept. 7 before the
bank's fine was disclosed.
Write to Sam Goldfarb at sam.goldfarb@wsj.com
(END) Dow Jones Newswires
October 18, 2016 21:35 ET (01:35 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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