8-KOther EventsExhibits & Filings

CAPITAL ONE FINANCIAL CORP 8-K Report, Corporate Update (Feb 8, 2007)

Filed February 8, 2007For Securities:COFCOF-PLCOF-PICOF-PKCOF-PNCOF-PJ

Summary

This 8-K filing from Capital One Financial Corporation on February 8, 2007, details the successful closing of a public offering of $500 million in Capital Securities by its statutory trust, Capital One Capital IV. These Capital Securities represent preferred beneficial interests in the trust and are backed by Capital Efficient Notes (CENts) issued by Capital One. The offering was underwritten by a syndicate of major financial institutions, including J.P. Morgan Securities, Banc of America Securities, Credit Suisse Securities, and Wachovia Capital Markets. The transaction also involves a subordinated guarantee from Capital One Financial Corporation and a Replacement Capital Covenant. This covenant restricts Capital One's ability to redeem or repurchase the CENts unless funded by the proceeds from the sale of specified equity-like securities. This structure aims to enhance Capital One's capital position and financial flexibility while providing investors with a fixed-income instrument.

Key Highlights

  • 1Capital One Financial Corporation successfully closed a $500 million public offering of Capital Securities through its trust, Capital One Capital IV.
  • 2The Capital Securities issued represent preferred beneficial interests in the trust.
  • 3Proceeds from the offering were used to purchase 6.745% Capital Efficient Notes (CENts) due 2082 issued by Capital One.
  • 4Capital One provided a subordinated guarantee for the Capital Securities.
  • 5A Replacement Capital Covenant was entered into, restricting the redemption of CENts to proceeds from the sale of similar equity-like securities.
  • 6The offering was underwritten by a syndicate led by J.P. Morgan Securities, Banc of America Securities, Credit Suisse Securities, and Wachovia Capital Markets.
  • 7The transaction is designed to strengthen Capital One's capital structure and financial resources.

Frequently Asked Questions

The primary purpose of this filing was to report the closing of a $500 million public offering of Capital Securities by Capital One Capital IV, a statutory trust, on February 5, 2007. It details the structure of the offering, including the use of proceeds and associated guarantees and covenants.

The Capital Securities are financial instruments representing preferred beneficial interests in Capital One Capital IV. The trust invested the proceeds from the sale of these securities, along with its common securities, into 6.745% Capital Efficient Notes (CENts) due 2082, which were issued by Capital One Financial Corporation. This effectively means the Capital Securities are indirectly backed by Capital One's debt.

The Replacement Capital Covenant imposes restrictions on Capital One's ability to redeem or repurchase the Capital Efficient Notes (CENts). Capital One can only redeem these notes if the funds come from the sale of securities that are similar in equity-like characteristics to the CENts or Capital Securities themselves. This covenant aims to ensure the long-term stability of Capital One's capital structure.

Key parties include Capital One Financial Corporation (as sponsor and issuer of CENts), Capital One Capital IV (the issuing trust), The Bank of New York (as various trustees), and the underwriters led by J.P. Morgan Securities Inc., Banc of America Securities LLC, Credit Suisse Securities (USA) LLC, and Wachovia Capital Markets, LLC.