Summary
Capital One Financial Corporation (COF) filed an 8-K on September 16, 2020, to report the issuance and sale of 5,000,000 depositary shares, each representing a 1/40th ownership interest in its Fixed Rate Non-Cumulative Perpetual Preferred Stock, Series K. This offering, which generated approximately $120.9 million in net proceeds after expenses, was conducted under an Underwriting Agreement with several major investment banks. The filing includes the Certificate of Designations, which formally establishes the terms of the Series K Preferred Stock and amends the Company's Restated Certificate of Incorporation. For investors, the key takeaway is the company's move to raise capital through preferred equity. The terms of this Series K Preferred Stock are crucial, as they include non-cumulative dividends and restrictions on common stock dividends or repurchases if preferred dividends are not met. This issuance provides Capital One with additional capital, potentially strengthening its balance sheet and regulatory capital position.
Key Highlights
- 1Capital One Financial Corp. issued 5,000,000 depositary shares representing Series K Preferred Stock.
- 2The offering generated approximately $120.9 million in net proceeds after deducting underwriting commissions and expenses.
- 3The Series K Preferred Stock is fixed-rate and non-cumulative, meaning missed dividends are not paid later.
- 4Dividends on the Series K Preferred Stock have priority over common stock and junior preferred stock.
- 5Restrictions are in place on common stock dividends/repurchases if Series K preferred dividends are not declared or set aside.
- 6The issuance was made under an Underwriting Agreement with major investment banks.
- 7The filing includes the Certificate of Designations which amends the Company's Certificate of Incorporation.