8-KShareholder MattersCorporate ChangesOther Events+1

CAPITAL ONE FINANCIAL CORP 8-K Report, Rights Modification (Jun 10, 2021)

Filed June 10, 2021For Securities:COFCOF-PLCOF-PICOF-PKCOF-PNCOF-PJ

Summary

Capital One Financial Corporation (COF) has filed an 8-K report detailing the issuance and sale of 1,000,000 shares of its 3.950% Fixed Rate Reset Non-Cumulative Perpetual Preferred Stock, Series M. This offering, which closed on June 8, 2021, raised approximately $987.7 million in net proceeds after deducting underwriting commissions and expenses. The Series M Preferred Stock carries a liquidation preference of $1,000 per share and establishes specific voting rights and dividend preferences as outlined in the filed Certificate of Designations. For investors, the key takeaway is Capital One's successful execution of a preferred stock offering, strengthening its capital base. However, the terms of the Series M Preferred Stock include a crucial dividend restriction: if dividends on this preferred stock are not declared and paid (or set aside), the company's ability to pay dividends or repurchase common stock or junior preferred stock will be restricted. This filing also includes the Underwriting Agreement and the Certificate of Designations, providing detailed terms for interested parties.

Key Highlights

  • 1Capital One issued and sold 1,000,000 shares of its 3.950% Fixed Rate Reset Non-Cumulative Perpetual Preferred Stock, Series M.
  • 2The offering generated approximately $987.7 million in net proceeds.
  • 3The Series M Preferred Stock has a liquidation preference of $1,000 per share.
  • 4A Certificate of Designations was filed, establishing the rights, powers, and privileges of the Series M Preferred Stock.
  • 5The terms of the Series M Preferred Stock impose restrictions on dividends and repurchases of common or junior preferred stock if dividends on Series M are not paid.
  • 6The offering was conducted under a Registration Statement on Form S-3, with a prospectus supplement dated June 7, 2021.
  • 7Key documents, including the Underwriting Agreement and Certificate of Designations, are filed as exhibits.

Frequently Asked Questions

This 8-K filing announces and details the completion of Capital One's offering of 1,000,000 shares of its Series M Preferred Stock, raising significant capital and providing details on the terms of this new securities issuance.

Capital One raised approximately $987.7 million in net proceeds from the offering, after accounting for underwriting commissions and estimated offering expenses.

The Series M Preferred Stock pays a fixed rate of 3.950% and is non-cumulative. Importantly, if Capital One fails to declare and pay (or set aside funds for) the dividends on the Series M Preferred Stock for the preceding dividend period, the company will be restricted from paying dividends on, or repurchasing, its common stock or any preferred stock that ranks junior to or on parity with the Series M Preferred Stock.

Investors can find more detailed information in the Certificate of Designations filed as Exhibit 3.1 to this 8-K filing, which outlines all the rights, preferences, and privileges of the Series M Preferred Stock. The Underwriting Agreement (Exhibit 1.1) also provides details on the terms of the offering.