8-KShareholder MattersCorporate ChangesOther Events+1

CAPITAL ONE FINANCIAL CORP 8-K Report, Rights Modification (May 4, 2021)

Filed May 4, 2021For Securities:COFCOF-PLCOF-PICOF-PKCOF-PNCOF-PJ

Summary

Capital One Financial Corporation (COF) filed an 8-K on May 4, 2021, detailing the issuance and sale of 27,000,000 depositary shares. Each depositary share represents a 1/40th ownership interest in shares of its Fixed Rate Non-Cumulative Perpetual Preferred Stock, Series L. This offering aims to raise capital and strengthen the company's financial position. The Series L Preferred Stock carries specific dividend and redemption rights, with restrictions on common stock dividend payments or repurchases if preferred dividends are not met. This filing is crucial for investors to understand the terms of this new preferred stock offering and its potential impact on Capital One's capital structure and future dividend policies for common shareholders.

Key Highlights

  • 1Capital One issued and sold 27,000,000 depositary shares representing Series L Fixed Rate Non-Cumulative Perpetual Preferred Stock.
  • 2Each depositary share represents a 1/40th ownership interest in a share of Series L Preferred Stock with a liquidation preference of $25 per depositary share.
  • 3The Series L Preferred Stock has dividend rights that are non-cumulative and perpetual.
  • 4Restrictions are in place regarding the payment of dividends or repurchases on common stock or junior preferred stock if dividends on the Series L Preferred Stock are not declared and paid.
  • 5The offering was conducted under an Underwriting Agreement with several prominent investment banks.
  • 6Net proceeds from the offering were approximately $652.9 million after deducting commissions and expenses.
  • 7The issuance is registered under a Form S-3 registration statement.

Frequently Asked Questions

The primary purpose of this 8-K filing is to report the issuance and sale of 27,000,000 depositary shares representing Series L Fixed Rate Non-Cumulative Perpetual Preferred Stock. This indicates a capital raise activity by the company.

The Series L Preferred Stock is fixed-rate, non-cumulative, and perpetual. Each depositary share represents a fraction of a share of this preferred stock and has a liquidation preference of $25. Holders are entitled to proportional rights regarding dividends, voting, redemption, and liquidation.

The company's ability to pay dividends on its common stock or repurchase it is restricted if it fails to declare and pay (or set aside funds for) dividends on the Series L Preferred Stock for the preceding dividend period. This provides a layer of protection for preferred stockholders.

Capital One Financial Corporation expects to receive approximately $652.9 million in net proceeds from the offering after deducting underwriting commissions and estimated offering expenses.